What proportion of the stocks total risk is caused

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Reference no: EM133433508

Question:

1. How large is your company's beta? If the market is expected to rise 10%, what percentage will this stock rise? What are the betas collected from Yahoo and ValueLine, respectively, and why do they differ from your beta? Conduct and explain statistical tests such as the goodness of fit (F) test on the regression model, and the t statistic and p value for the beta coefficient.

ANOVA
	df	SS	MS	F	Significance F
Regression	1	0.0480427	0.0480427	14.812084	0.0002984
Residual	58	0.1881219	0.0032435
Total	59	0.2361646

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	0.001697016	0.0076966	0.2204898	0.826264	-0.0137094	0.01710338	-0.01371	0.017103
X Variable 1	0.641512971	0.1666853	3.848647	0.0002984	0.307856	0.9751699	0.307856	0.97517

2. How large is R2 and what does it mean? What proportion of the stock's total risk is caused by the company itself or what proportion of its total risk is unsystematic risk?

3. Explain step by step how you calculated interest-bearing debt, market capitalization of equity, unlevered beta, and industry beta, and justify which model you used to un-lever beta and re-lever beta. Your peer company's unlevered beta will be given to you. Do not just post the results without any explanation.

4. Adjust your beta using the following Bloomberg equation: Adjusted beta = 0.33 + 0.67*Industry Beta

Reference no: EM133433508

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