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  • Solution For Case On Ambuja Cements

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    Ishpal Singh
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    This document provides stock price and market index data for Ambuja Cements from January 2006 to May 2008. It calculates the average return on the stock (Ra) and the average return on the market (Rm) over this period. It then uses this data to calculate the stock's beta of 0.501534, which is a measure of the stock's volatility relative to the overall market. Finally, it calculates the stock's cost of equity as 6.3976%, which is the risk-free rate (Rf) of 6.83% plus the stock's beta multiplied by the difference between the average market return (Rm) and the risk-free rate.

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    Sol for Ambuja Cements

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    This document provides stock price and market index data for Ambuja Cements from January 2006 to May 2008. It calculates the average return on the stock (Ra) and the average return on the market (Rm) over this period. It then uses this data to calculate the stock's beta of 0.501534, which is a measure of the stock's volatility relative to the overall market. Finally, it calculates the stock's cost of equity as 6.3976%, which is the risk-free rate (Rf) of 6.83% plus the stock's beta multiplied by the difference between the average market return (Rm) and the risk-free rate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    7 views2 pages

    Solution For Case On Ambuja Cements

    Uploaded by

    Ishpal Singh
    This document provides stock price and market index data for Ambuja Cements from January 2006 to May 2008. It calculates the average return on the stock (Ra) and the average return on the market (Rm) over this period. It then uses this data to calculate the stock's beta of 0.501534, which is a measure of the stock's volatility relative to the overall market. Finally, it calculates the stock's cost of equity as 6.3976%, which is the risk-free rate (Rf) of 6.83% plus the stock's beta multiplied by the difference between the average market return (Rm) and the risk-free rate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    SOLUTION FOR CASE ON AMBUJA CEMENTS

    BSE (MARKET)
    Year
    Jan-06
    Feb-06
    Mar-06
    Apr-06
    Jan-07
    Feb-07
    Mar-07
    Apr-07
    Jan-08
    Feb-08
    Mar-08
    Apr-08
    May-08

    Sensex
    Stock price Rm(return on market)
    9919.89
    88.5
    10370.24
    88.2
    11279.96
    103.25
    12042.56
    124.05
    14090.92
    137.15
    12938.09
    115.95
    13072.1
    106.7
    13872.37
    117.95
    17648.71
    119.6
    17578.72
    120.95
    15644.44
    121.05
    17287.31
    113.9
    16415.57
    95.2
    Total

    Ra(avg)
    Rm(avg)

    Beta
    0.501534
    Ke(Cost of equity)=Rf+Bi(Rm-Rf)

    4.53986889
    8.772410282
    6.760662272
    17.00934021
    -8.18136786
    1.035778851
    6.121969691
    27.22202479
    -0.396572894
    -11.00353154
    10.5013027
    -5.042658459
    57.33922692

    1.140330718
    4.410709763

    0.0683+0.501534(0.01140330718-0.0683)

    Ra(return on stock)
    -0.338983051
    17.06349206
    20.14527845
    10.56025796
    -15.45752825
    -7.977576542
    10.54358013
    1.398897838
    1.128762542
    0.082678793
    -5.906650145
    -16.41791045

    Ra-Ra(avg)
    -1.4793138
    15.923161
    19.004948
    9.4199272
    -16.597859
    -9.1179073
    9.4032494
    0.2585671
    -0.0115682
    -1.0576519
    -7.0469809
    -17.558241

    Rm-Rm(avg) ((Ra-Ra(avg))*(Rm-Rm(avg))
    (Rm-Rm(avg))2
    0.129159126
    -0.191066874
    0.01668208
    4.361700518
    69.45206109
    19.02443141
    2.349952508
    44.6607246
    5.522276792
    12.59863044
    118.6781821
    158.725489
    -12.5920776
    209.0015286
    158.5604189
    -3.37493091
    30.77230706
    11.39015866
    1.711259928
    16.09140391
    2.92841054
    22.81131502
    5.898256021
    520.3560931
    -4.80728266
    0.055611495
    23.10996655
    -15.4142413
    16.302902
    237.598835
    6.090592936
    -42.92029186
    37.09532231
    -9.45336822
    165.9845191
    89.36617074

    14.82429934 1.1403307 4.410709763

    0.03976

    633.7861372

    1263.694255

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