Question: Using the Capital Asset Pricing Model, calculate the required rate of return on equity of Aussie Growers Company (AGC). Justify your data choices. Proxy Company:

Using the Capital Asset Pricing Model, calculate the required rate of return on equity of Aussie Growers Company (AGC). Justify your data choices.

Proxy Company: Costa Group (CGC)

Using the Capital Asset Pricing Model, calculate the required rate of return

Covariance CGC Variance of market CGC 0.523784369 0.514626974 1.772 Beta CGC Beta AGC Debt to Equity AGC 1.02 0.75 1.21 Excess Returns CGC 0.5 y = 1.0178x+0.0142 R = 0.9719 -2.5 - 2 -1.5 -OS 0.5 . -0.5 Costa Group (CGC) Data Company Return (ri) Market Return (rm) Risk-Free (rf) ri - rf Dec-17 0.0476 0.0159 1.817 -1.7694 Jan-18 -0.0758 -0.0045 -1.8478 Feb-18 - 0.1934 -0.0036 1.854 1.854 -0.0036 -1.6606 Mar-18 Mar 10 -0.0618 -0.0427 1.916 *0.0427 -1.9778 Apr-18 Apr 18 0.063 0.0388 0.0388 1.979 -1.916 1.979 0.0592 2.310 May-18 W.234 0.0049 1.82 0.0049 Jun-18 -1.7608 4.02 0.0728 0.0304 1.95 -1.8772 Jul-18 Viva -0.0461 Juleo wome 0.00 0.0138 Vives 1.997 Aug-18 -2.0431 2.045" - -0.0813 0.0063 1.977 -2.0583 Sep-18 Sepoto 2.0505 -0.0138 -0.0177 1.938 Voir Oct-18 -1.9518 1950 DC10 -0.1445 0.143 -0.0608 1.93 -2.0745 Nov-18 novo 0.2475 -0.0280 1.905 -1.6575 -0.0280 1.905 2.0573 Dec-18 -0.025 2.02 -0.0037 1.944 "0.0057 -1.969 Jan-19 war 12 " -0.2547 0.0387 1.889 1.00 -2.1437 Feb-19 2.1457 -0.0344 V. 0.0519 1.751 . -1.7854 Mar-19 -0.0375 0.0019 1.555 -1.5925 Apr-19 www 0.1031 Apr 19 1922 0.1051 1.436 0.0234 -1.3329 May-19 23323 -0.3034 ".3054 0.0113 Vivas 1.226 -1.5294 Jun-19 229 surt 19 0.0228 W.UZZO 0.0347 0.0541 1.05 . -1.0272 0 Jul-19 Jules -0.0173 0.0293 W.UZ 0.990 0.996 - 1.0133 Aug-19 -0.2065 -0.0306 0.0300 0.009 0.889 -1.0955 Sep-19 1.0955 0.1905 0.0127 Viva! 0.785 -0.5945 Oct-19 -0.1803 -0.0037 0.852 -1.0323 Nov-19 2.0323 -0.0877 0.0274 0.756 -0.8437 Dec-19 0.0457 -0.05 . -0.0236 0.938 -0.988 Jan-20 0.1174 0.0498 0.1 0.74 -0.6226 Feb-20 0.0725 -0.0821 -0.5595 Mar-20 -0.0709 -0.2118 0.278 -0.3489 Apr-20 0.0509 como 0.0878 0.22 -0.1691 May-20 0.1142 0.0422 0.293 -0.1788 Jun-20 -0.0994 0.0247 0.272 -0.3714 Jul-20 0.031 2015 0.0051 0.247 w -0.216 Aug-20 0.1572 0.0224 0.198 -0.0408 Sep-20 -0.0289 -0.0404 0.126 -0.1549 Oct-20 0.0595 0.0192 0.073 -0.0135 Nov-20 0.1152 0.0939 0.06 0.0552 rm -rf (MRP) -1.8011 -1.7765 -1.8576 -1.9587 -1.9402 -1.8151 -1.9196 1.9834 -1.9832 1.9707 -1.9707 -1.9557 -1.9908 -1.933 1.955 -1.9477 -1.8503 -1.6991 -1.5531 2.333 -1.4126 -1.2147 -1.0153 -0.9667 V.2007 -0.9196 -0.7723 "0.0557 -0.8557 -0.7286 -0.9616 -0.6902 -0.7141 -0.4898 -0.1322 -0.2508 -0.2473 -0.2419 -0.1756 -0.1664 -0.0538 0.0339 -1 -1.5 0.632 -2.5 Covariance CGC Variance of market CGC 0.523784369 0.514626974 1.772 Beta CGC Beta AGC Debt to Equity AGC 1.02 0.75 1.21 Excess Returns CGC 0.5 y = 1.0178x+0.0142 R = 0.9719 -2.5 - 2 -1.5 -OS 0.5 . -0.5 Costa Group (CGC) Data Company Return (ri) Market Return (rm) Risk-Free (rf) ri - rf Dec-17 0.0476 0.0159 1.817 -1.7694 Jan-18 -0.0758 -0.0045 -1.8478 Feb-18 - 0.1934 -0.0036 1.854 1.854 -0.0036 -1.6606 Mar-18 Mar 10 -0.0618 -0.0427 1.916 *0.0427 -1.9778 Apr-18 Apr 18 0.063 0.0388 0.0388 1.979 -1.916 1.979 0.0592 2.310 May-18 W.234 0.0049 1.82 0.0049 Jun-18 -1.7608 4.02 0.0728 0.0304 1.95 -1.8772 Jul-18 Viva -0.0461 Juleo wome 0.00 0.0138 Vives 1.997 Aug-18 -2.0431 2.045" - -0.0813 0.0063 1.977 -2.0583 Sep-18 Sepoto 2.0505 -0.0138 -0.0177 1.938 Voir Oct-18 -1.9518 1950 DC10 -0.1445 0.143 -0.0608 1.93 -2.0745 Nov-18 novo 0.2475 -0.0280 1.905 -1.6575 -0.0280 1.905 2.0573 Dec-18 -0.025 2.02 -0.0037 1.944 "0.0057 -1.969 Jan-19 war 12 " -0.2547 0.0387 1.889 1.00 -2.1437 Feb-19 2.1457 -0.0344 V. 0.0519 1.751 . -1.7854 Mar-19 -0.0375 0.0019 1.555 -1.5925 Apr-19 www 0.1031 Apr 19 1922 0.1051 1.436 0.0234 -1.3329 May-19 23323 -0.3034 ".3054 0.0113 Vivas 1.226 -1.5294 Jun-19 229 surt 19 0.0228 W.UZZO 0.0347 0.0541 1.05 . -1.0272 0 Jul-19 Jules -0.0173 0.0293 W.UZ 0.990 0.996 - 1.0133 Aug-19 -0.2065 -0.0306 0.0300 0.009 0.889 -1.0955 Sep-19 1.0955 0.1905 0.0127 Viva! 0.785 -0.5945 Oct-19 -0.1803 -0.0037 0.852 -1.0323 Nov-19 2.0323 -0.0877 0.0274 0.756 -0.8437 Dec-19 0.0457 -0.05 . -0.0236 0.938 -0.988 Jan-20 0.1174 0.0498 0.1 0.74 -0.6226 Feb-20 0.0725 -0.0821 -0.5595 Mar-20 -0.0709 -0.2118 0.278 -0.3489 Apr-20 0.0509 como 0.0878 0.22 -0.1691 May-20 0.1142 0.0422 0.293 -0.1788 Jun-20 -0.0994 0.0247 0.272 -0.3714 Jul-20 0.031 2015 0.0051 0.247 w -0.216 Aug-20 0.1572 0.0224 0.198 -0.0408 Sep-20 -0.0289 -0.0404 0.126 -0.1549 Oct-20 0.0595 0.0192 0.073 -0.0135 Nov-20 0.1152 0.0939 0.06 0.0552 rm -rf (MRP) -1.8011 -1.7765 -1.8576 -1.9587 -1.9402 -1.8151 -1.9196 1.9834 -1.9832 1.9707 -1.9707 -1.9557 -1.9908 -1.933 1.955 -1.9477 -1.8503 -1.6991 -1.5531 2.333 -1.4126 -1.2147 -1.0153 -0.9667 V.2007 -0.9196 -0.7723 "0.0557 -0.8557 -0.7286 -0.9616 -0.6902 -0.7141 -0.4898 -0.1322 -0.2508 -0.2473 -0.2419 -0.1756 -0.1664 -0.0538 0.0339 -1 -1.5 0.632 -2.5

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