This 14 page paper looks at a case study provided by the student. The paper considers the different aspects to look at in terms of feasibility in the case study when considering the changes in advertising and technology investments. The paper then look at how the risk free rate would be determined, how the market risk premium could be assessed and then consider which companies could be used as a guide to assess the beta and then shows calculations for the beta. The bibliography cites 5 sources.
Name of Research Paper File: TS14_TEameritr.rtf
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make commercial sense, must increase the level of custom and create a profit without being counterbalanced by the opportunity costs and loss of business from other sectors. In addition to
this there is also the need to compare the income it will generate and the cost of that income to ensure that the way projects, in this case the advertising
and the investment in the technology. The first change is that of the way the company is to change the trading charging structure, for $29.95 a trade to a
charge of $8 per transaction undertaken on the internet. It is fair to assume that the rest of the strategy was using this as a lever and the advertising would
be used to establish this market position. The first consideration is what the demand will be at the new level and if the increased level of trade will make
up front he decreased price for each trade. This is known as elasticity. We have been told that this is a very price sensitive market, but to undertake this strategy
Ameritrade need to know the price elasticity of demand for the trading service. Elasticity is a measures the responsiveness of change in demand of a product in relationship to the
level of change in price. The usual pattern will be that as the price of goods or services increase the demand for them will decrease and when the price for
goods or services decreases the demand will increase. The demand may be new demand, or may shift from other suppliers, in this model it is not necessary to identify where
that demand originated. The elasticity allows the level of this change to be measured; this is undertaken, often using historical figures by taking the change in the demand in
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