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0.1 0.2 0.

02
0.15 0.2 0.03
0.2 0.2 0.04
0.04 0.2 0.008
-0.01 0.2 -0.002
Average 0.10
0.10
rf 4.13% rf 0
B 2.1 B 0.9
rm - rf 7.91% rm 11%

R 0.207 R 10.35%

if you have rm - rf if you have rm and rf separate


rf 2.87%
B1 0.83
B2 1
Risk premium 1 8%
risk premium 2 2%

R 0.115
B 1.32
market 5%
Stock 3%

0.066
rf 0%
B 1.16
market 5%
stock price 3%

-0.028
-0.028
squared
Deviation Product of
Deviation deviation
from average from deviations
Market return Stock return average from the from
market average
stock return average
return returns
market return

1 -0.1 -0.05 -0.13 -0.08 0.02 0.010222222


2 -0.2 -0.04 -0.23 -0.07 0.05 0.015555556
3 0.1 0.14 0.07 0.11 0.00 0.007555556
4 0.1 0.08 0.07 0.05 0.00 0.003555556
5 0.25 0.08 0.22 0.05 0.05 0.011555556
6 0.05 -0.05 0.02 -0.08 0.00 -0.00127778
Average 0.03 0.03 Variance 0.1283 0.0472

Beta 0.368

1
Covariance
Returns -0.06 market return 0.1
0.15 0.1
0.15 0.16
Average 0.12
rf 0.04
B 0.367532468

Expected Return 0.07


E 40
D 60
rf 6%
Be 1.31
rp 0.067
re 0.15
V 100
Cost of capital 0.0951
E 40
D 60
rE 0.17
rD 0.05
V 100
WACC 0.098
1 200

3 141

b 1.5 b 1.7
rm 16% rm 16%
rf 7% rf 6%
r 0.205 r 0.23
PV 80.6 PV 162.6
CEQ3 98.721 CEQ1 172.358