Regression Analysis - CAPM

This needs to be done in Excel. The CAPM states that the excess return on a stock is proportional to the excess return on the market. This implies: X stock = beta*(X market) Where X is the excess return = return- (return on risk free asset). One criticism of the CAPM regression we ran in class is that it excludes relevant variables. Some have argued that "surprise" factors impact excess return on stocks. You will explore this issue. Choose two companies from the CAPM example we did in class. (CAPM - From Class.xls) (1) Redo the CAPM regression (2) The attached filed APM.xls contains data on POIL, FRBIND and CPI which are: price of oil, Federal Reserve Board Index of in... click for more

Financial ratio and trend analysis

Financial ratio and trend analysis - File contains 3 tabs. Please check first tab, I am totally stumped on the second tab (trend analysis) and the third tab I was able to do some (first colomn), but when I tried to duplicate some of the given 2002 year end ratios - I could not, so I'm not sure how to approach the problem. Attachment to be uploaded by BrainMass Admin'

Calculate the expected rate of return and standard deviation of expected returns of stocks when the probability distribution of expected return are given.

1. Stocks X and Y have the following probability distributions of expected future returns: PROBABILITY X Y Rate of return Y Rate of return X 10% -10% -35% -4% -1% 20% 20% 0% 0% 4% 40% 12% 20% 8% 5% 20% 20% 25% 5% 4% 10% 38% 45% 5% 4% a. Calculate the expected rate of return, khat, for Stock Y (expected return for Stock X, Kx hat, equals 12%). b. Calculate the standard deviation of expected returns for Stock X. (that for Stock Y is 20.35%). Now Calculate the coefficient of variation for Stock Y. Is it possible that most investors might regard Stock Y as being less risky than ... click for more

discounted cash flows

How do you compute the adjusted gross margin, adj net sales, and the adusted gross profit given the COGS? Using these numbers how do you compute SD and CV? Refer to attachment

present value in dollars of equity ownership of the subsidiary; price changes due to changes in exchange rates

16-8:  After all foreign and U.S. taxes, a U.S. corporation expects to receive 3 pounds of dividends per share from a British subsidiary this year. The exchange rate at the end of the year is expected to be $1.60 per pound, and the pound is expected to depreciate 5 percent against the dollar each year for an indefinite period. The dividend (in pounds) is expected to grow at 10 percent a year indefinitely. The parent U.S. corporation owns 10 million share of the subsidiary. What is the present value in dollars of its equity ownership of the subsidiary? Assume a cost of equity capital of 15 percent for the subsidiary. 16-13:  Early in September 1983, it took 245 Japanese yen to equal $1. ... click for more