Question: - Submit your report in MS Excel format. Find the following Betas for the companies listed below: (use www.globeinvestor.com) Assuming a risk-free rate (R f
- Submit your report in MS Excel format.
Find the following Betas for the companies listed below: (use www.globeinvestor.com)
Assuming a risk-free rate (Rf) of 2% and the Return from the market (Rm) of 6.5% calculated the expected return of each company based on the Capital Asset Pricing Model.
| Company | Stock Symbol | Beta | Expected Return |
| TD Bank | TD-T |
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| Royal Bank | RY-T |
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| Canadian Tire Corporation | CTC.A-T |
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| Suncor Energy | SU-T |
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| Sierra Wireless | SW-T |
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| | TWTR-N |
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| | FB-Q |
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| Microsoft | MSFT-Q |
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| Apple | AAPL-Q |
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| Amazon | AMZN-Q |
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| Alphabet Inc. (Google) | GOOGL-Q |
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| Starbucks | SBUX-Q |
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Re-order your list from the lowest beta to the highest and compare their expected return.
- Comment on your results. (Hint: Look at the grouping of the companies, and the value of betas from 0 to 0.5, from 0.5 to 1, from 1 to 1.25 and 1.25 and up)
- What does the value of beta tell us about a company? What does the value of beta and CAPM tell us about the risk in investing in a company?
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