Problem Day Cost of Capital 11.30.2011 (2)

Problem Day Cost of Capital 11.30.2011 (2) -...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Day: Cost of  Capital
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Housekeeping Items POW Quiz due this Thursday by 5pm Ch. 13 Reading Quiz due Monday morning at 8am Service and Career Development Quizzes are posted on  Blackboard.  Please record your completion for extra  credit. POW Quiz also due Thursday, December 8 by 5pm
Background image of page 2
Stay In Touch Rhett “alpha male” Weller Todd “the man” Castagna todd.castagna@gmail.com rhettweller@gmail.com
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
We’d love your feedback! http://www.tinyurl.com/rhettandtodd
Background image of page 4
Some POW Hints… (because we are awesome) Holding period is the return for the period. To calculate it: (New – Old) (Old) For Standard Deviation, use the formula in the book in the FOOTNOTE Pg 8-2 Or use Excel function =STDEV() Don’t annualize the monthly returns Using the CAPM, for market return, take the average monthly return of the market
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Free Quiz Question! Professional Development Morning Market Call – BYU business news show Company analysis, internship experience, Marriott School clubs, market commentary, etc The quiz question will be…. (drum roll please) “I have done (or will do) one of following: ‘Like’ Morning Market Call on Facebook
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Today’s Agenda CAPM Build-up Method WACC
Background image of page 8
Capital Asset Pricing Model 3 components: Risk free rate (usually something like Treasuries) Market Return Beta Formula: Rf + B(Rm – Rf)
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Variability of Returns Compared with Size of Portfolio 1 10 20 25 49% - 24% - 19% - Systematic or nondiversifiable risk (result of general market influences) Unsystematic or diversifiable risk (related to company-unique events) Total Risk Number of stocks in portfolio Average annual standard deviation (%)
Background image of page 10
Where do Beta’s come from? Beta measures the amount of
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 29

Problem Day Cost of Capital 11.30.2011 (2) -...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online