Use the data in exhibits 10 to 14 to calculate a discount rate for valuing the cost savings. Explain and defend your choice of beta and the risk free rate and market risk premium. here goes exhibits - Exhibit 10 THE MERGER OF HEWLETT-PACKARD AND COMPAQ (A): STRATEGY AND VALUATION Monthly Stock Prices CPQ HWP Ratio of CPQ to HWP Price Beta Price Beta Price Sep-98 31.63 na 26.47 na 1.19 Oct-98 31.63 na 30.13 na 1.05 Nov-98 32.50 1.07 31.28 1.34 1.04 Dec-98 42.00 1.15 34.16 1.35 1.23 Jan-99 47.63 1.15 39.19 1.36 1.22 Feb-99 35.38 1.36 33.22 1.47 1.06 Mar-99 31.69 1.35 33.91 1.45 0.93 Apr-99 22.31 1.29 39.44 1.47 0.57 May-99 23.69 1.25 47.16 1.35 0.50 Jun-99 23.69 1.15 50.25 1.34 0.47 Jul-99 24.06 1.13 52.34 1.30 0.46 Aug-99 23.16 1.12 52.69 1.28 0.44 Sep-99 22.88 1.06 45.38 1.33 0.50 Oct-99 19.13 0.95 37.09 1.21 0.52 Nov-99 24.44 0.95 47.44 1.23 0.52 Dec-99 27.06 0.97 56.88 1.28 0.48 Jan-00 27.25 0.94 54.13 1.28 0.50 Feb-00 25.13 0.98 67.25 1.16 0.37 Mar-00 27.00 0.96 66.44 1.06 0.41 Apr-00 29.19 0.91 67.50 1.04 0.43 May-00 26.25 0.95 60.09 1.08 0.44 Jun-00 25.56 0.94 62.44 1.08 0.41 Jul-00 28.06