Company C, a newly listed company on the Alternative Investment Market (AIM) of the London Stock Exchange.

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Question:

Company C, a newly listed company on the Alternative Investment Market (AIM) of the London Stock Exchange. You observe the following information.

Month

Feb

Jan

Dec

Nov

Oct

Sep

A (share price at end of month in pence)

256

259

239

248

238

230

FTSE100 (index)

7693

7720

7740

7687

7350

7390

Required:

(a) Estimate the beta value for Company C, using the covariance-variance approach.

(b) Identify the practical measurement issues arising from the use of

(i) the monthly share prices; (4 marks)

(ii) the sample period; (4 marks)

(iii) FTSE100. (2 marks)

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

See More Books

Posted Date: Mar 25, 2022 04:21 AM

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Company C, a newly listed company on the Alternative Investment Market (AIM) of the London Stock Exchange.

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a Beta of company C using the covariancevariance approach To calculat... View the full answer

Intermediate Accounting

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