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| Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report. | | Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. In addition, here, we have assumed that for an investment to be considered 'medium' risk, it must have a beta value of between 0.5 and 1.5. Further information about the beta ratings can be found in the appendix section of this report. |
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| ==== Risks that Johnson & Johnson is exposed to: ====
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| Risks Related to Our Business, Industry and Operations:
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| * The Company’s businesses operate in highly competitive product markets and competitive pressures could adversely affect the Company’s earnings.
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| * Interruptions and delays in manufacturing operations could adversely affect the Company’s business, sales and reputation
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| * The Company relies on third parties to manufacture certain of our products. Any failure by or loss of a third party manufacturer could result in delays and increased costs, which may adversely affect our business.
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| * Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
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| * Global health crises, pandemics, epidemics, or other outbreaks could adversely disrupt or impact certain aspects of the Company’s business, results of operations and financial condition
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| Risks Related to Government Regulation and Legal Proceedings:
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| * Global sales in the Company’s Pharmaceutical and MedTech segments may be negatively impacted by healthcare reforms and increasing pricing pressures
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| * The Company is subject to significant legal proceedings that can result in significant expenses, fines and reputational damage.
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| * The Company faces significant regulatory scrutiny, which imposes significant compliance costs and exposes the Company to government investigations, legal actions and penalties
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| * Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.
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| Risks Related to Our Intellectual Property
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| * The Company faces increased challenges to intellectual property rights central to its business.
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| Risks Related to Product Development, Regulatory Approval and Commercialization
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| * Significant challenges or delays in the Company’s innovation and development of new products, technologies and indications could have an adverse impact on the Company’s long-term success
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| Risks Related to Financial and Economic Market Conditions:
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| * The Company faces a variety of financial, economic, legal, social and political risks associated with conducting business internationally.
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| * Failure to maintain a satisfactory credit rating could adversely affect our liquidity, capital position, borrowing costs and access to capital markets
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| * The Russia-Ukraine War, and actions taken in response to the Russia-Ukraine War, could adversely affect our business, results of operations or financial condition.
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| == Financials == | | == Financials == |