Some of you may remember Blackberry as the top leader in mobile phone. The book pointed out Blackberry chose to use Constellation Software's (a large software only company) Cost of Capital 6.95% for software project evaluation. Note that unlike Constellation Software, Blackberry has several other main lines of business (hardware, network security, services etc.) so some would argue whether that is the right decision. Would you agree with Blackberry's decision? What could be the rationale and implications of your argument? Do you agree with Blackberry using Constellation Software's Cost of Capital to evaluate its investments?
Some of you may remember Blackberry as the top leader in mobile phone. The book pointed out Blackberry chose to use Constellation Software's (a large software only company) Cost of Capital 6.95% for software project evaluation. Note that unlike Constellation Software, Blackberry has several other main lines of business (hardware, network security, services etc.) so some would argue whether that is the right decision. Would you agree with Blackberry's decision? What could be the rationale and implications of your argument? Do you agree with Blackberry using Constellation Software's Cost of Capital to evaluate its investments?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Some of you may remember Blackberry as the top leader in
mobile phone. The book pointed out Blackberry chose to use
Constellation Software's (a large software only company) Cost
of Capital 6.95% for software project evaluation. Note that
unlike Constellation Software, Blackberry has several other
main lines of business (hardware, network security, services
etc.) so some would argue whether that is the right decision.
Would you agree with Blackberry's decision? What could be
the rationale and implications of your argument?
Do you agree with Blackberry using Constellation Software's
Cost of Capital to evaluate its investments?
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