Requirement #1: Consider the following quotation from a leading investment manager: "The shares of Southern Co. have traded close to $12 for the past three years. Since Southern's stock has demonstrated very little price movement, the stock has a low beta. Texas Instruments, on the other hand, has traded as high as $150 and as low as its current $75. Since TI's stock has demonstrated a large amount of price movement, the stock has a very high beta." Do you agree with this analysis? Explain.

Requirement #2: Explain why the use of debt by a firm necessitates an estimate of both the cost of equity and the cost of debt and why the beta of a company is a function of a number of factors; identify the most important three. What is KMB's beta (indicate source)? Which factors do you think have the most influence on KMB's beta? Why?