User Account

All Pages

What are the betas listed for the given companies

Assignment Help Corporate Finance
Reference no: EM131093956

The tendency of a stock's price to move up and down with the market is reflected in its beta coefficient. Therefore, beta is a measure of an investment's market risk, and is a key element of the CAPM.

In this part of the project, you get financial information using Yahoo!Finance (found at https://finance.yahoo.com/ )

To find a company's beta, enter the desired stock symbol and request a basic quote. Once you have the basic quote, select the "Key Statistics". Scroll down this page to find the stock's beta.

In your initial response to the topic you have to answer all 5 questions.

You are expected to make your own contribution in a main topic as well as respond with value added comments to at least two of your classmates as well as to your instructor.

From Yahoo!Finance obtain a report on any two companies.

1. What are the betas listed for these companies?

2. If you made an equal dollar investment in each stocks what would be the beta of your portfolio?

3. If you made 70% of dollar investment in stock A, and 30% of dollar investment in stock B, what would be the beta of your portfolio? Please how your work.

4. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on these two stocks. Assumptions and Data: Note that you will need the risk-free rate and the market risk premium. Assume a 5% market risk premium. To get the current yield on 10-year Treasury securities go to Finance!Yahoo's (www.finance.yahoo.com) -click on Market Data - Bonds. You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Please show your work.

5. Compare the required return on these stocks calculated using CAPM in question #4 against their historical return over the last 52 weeks, found in the Yahoo!Finance - Key Statistics. Is there a difference between these returns? Is this a problem? Why is there a difference?

Reference no: EM131093956

Questions Cloud

Implantable heart pacemakers contain small circuit boards : Implantable heart pacemakers contain small circuit boards called substrates. These substrates are assembled, cut to shape, and fired. Some of the substrates will separate, or delaminate, making them useless.
Find the profit-maximizing price and quantity : Economics 311: Intermediate Microeconomics - Microeconomics Problems. A monopolist faces the demand curve-  P = 120 - 2Q, Find the profit-maximizing price and quantity. Suppose a union imposes a wage of $4 per hour. How many workers will lose their j..
Brief describe the size of the company in financial terms : Brief description of the size of the company in financial terms, in comparison to its competitors if the information is available.
Conclude about interaction in the data : We have data from a four by three factorial with 24 units. Below are ANOVA tables and residual versus predicted plots for the data and the log transformed data. What would you conclude about interaction in the data? Original data:
What are the betas listed for the given companies : What are the betas listed for these companies? If you made an equal dollar investment in each stocks what would be the beta of your portfolio?
Conducted to study the effect of using slash chips : Particleboard is made from wood chips and resins. An experiment is conducted to study the effect of using slash chips (waste wood chips) along with standard chips.
Strategic inputs of marketing effectiveness : Write on the strategic inputs of marketing effectiveness in terms of market share, sales volume, sales growth and new product introduction.
Part of an experiment on barley germination : Brewer's malt is produced from germinating barley, so brewers like to know under what conditions they should germinate their barley. The following is part of an experiment on barley germination.
Explain stakeholder theory : 1. Explain stakeholder theory. 2. Outline two forms of stakeholder management. 3. Where does stakeholder theory go wrong?

Reviews

Write a Review

Corporate Finance Questions & Answers

  Find the total interest expense

What is the total interest expense over the life of the bonds cash interest payments? Premium amortization?

  Explain the difference between the two methods

Explain the difference between the two methods and which method is required by the Australian Accounting standards?

  1 what is the relationship between risk and expected

1. what is the relationship between risk and expected return?2. how much financial risk are you willing to take? by

  1 discuss the pros and cons of fixed exchange rate systems

1. discuss the pros and cons of fixed exchange rate systems and flexible exchange rate systems.2 low-income nations

  Consider the financial statements below for media motors

consider the financial statements below for media motors. the firms cost of capital is 10. the firm is stable and the

  Compute the unit product cost for year 1, year 2, and year 3

During its first year of operations, O'Donnell produced 100,000 units and sold 80,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Donnell produced 80,000 units and sold 75,000 u..

  Evaluate the use of trading rules

If the market is efficient in the semi-strong form, no one should be able to consistently outperform the market. What roles then do financial analysts play?

  Find the investment in life insurance

You purchased a $100000 life insurance policy for single pay of $35000. If you wish to earn 9 percent on invested funds how soon must you die for the policy to have been the superior option?

  Which project would you recommend to management

Which project would you recommend to management, and how would you justify your selection?

  Average price-earnings ratio

What is the value per share of the company's stock

  1 there exists a special kind of bond investment called a

1 there exists a special kind of bond investment called a zero coupon bond. a zero coupon bond pays the owner of the

  Vertical and horizontal analysis of the balance sheets

Vertical and Horizontal analysis of the Balance Sheets for the past three years (all yearly balances set as a percentage of total assets for that year).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd