Beta
- Submitted by: zhangcong
- Views: 83
- Category: English
- Date Submitted: 05/15/2016 07:16 AM
- Pages: 3
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The assignment is mainly about ...... We chose Cable & Wireless Communication plc as company A, and Tullow Oil plc as company B. Company A started its business in the 1870s, providing support and services to all customers, connecting people with information, entertainment and each other through our mobile, fixed, broadband and TV services. Their business-to-business customers rely on us to deliver the reliable, high-capacity communications systems they need to operate and compete in the global economy. Company B is a leading independent oil and gas exploration and production company. Its focus is on finding and monetising oil in Africa and the Atlantic Margins. Its portfolio of over 120 licences spans 22 countries which are managed as three Business Delivery Teams. We are headquartered in London. Our shares are listed on the London, Irish and Ghanaian Stock Exchanges.
The first part is given the estimation the equity beta of company B, and FTSE 250 is chosen as the benchmark, for the reason that the company is one of the 101st to the 350th largest companies listed on the London Stock Exchange. Here are some details bellow.
According to A few things transport regulators should know about risk and the
cost of capital(Alexander, Estache and Oliveri, 2000), the model that used to estimate equity beta is:
Where is the return of the stock for company B, is the return for FTSE 250, is the slope, is the intercept. The slope of the regression corresponds to the beta of the stock, and measures the riskiness of the stock(Damodaran, 2006). In order to construct the regression function, input the historical stock price and FTSE 250 price for 10 years weekly into the Eviews, and calculate their rate of return R using the closing price today and the price on the yesterday.
The time frame which is used to calculate Re is from 2006 to 2015 weekly, for the reason that the company B belongs to oil industry which the price is fluctuate widely, so it needs a...
The first part is given the estimation the equity beta of company B, and FTSE 250 is chosen as the benchmark, for the reason that the company is one of the 101st to the 350th largest companies listed on the London Stock Exchange. Here are some details bellow.
According to A few things transport regulators should know about risk and the
cost of capital(Alexander, Estache and Oliveri, 2000), the model that used to estimate equity beta is:
Where is the return of the stock for company B, is the return for FTSE 250, is the slope, is the intercept. The slope of the regression corresponds to the beta of the stock, and measures the riskiness of the stock(Damodaran, 2006). In order to construct the regression function, input the historical stock price and FTSE 250 price for 10 years weekly into the Eviews, and calculate their rate of return R using the closing price today and the price on the yesterday.
The time frame which is used to calculate Re is from 2006 to 2015 weekly, for the reason that the company B belongs to oil industry which the price is fluctuate widely, so it needs a...