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  • Expected Return Calculation

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    vanisha
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    This document shows historical share prices and market index returns for various dates going back to 2012. It then calculates the average expected return on the market index as 13%. Finally, it uses the Capital Asset Pricing Model to calculate the expected return on Coal India Ltd stock, finding it to be 12.63%, based on the average market return of 12.93%, a risk free rate of 7%, and a beta of 0.95 for Coal India as a low risk security.

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    Expected Return Calculation OF CIL

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    This document shows historical share prices and market index returns for various dates going back to 2012. It then calculates the average expected return on the market index as 13%. Finally, it uses the Capital Asset Pricing Model to calculate the expected return on Coal India Ltd stock, finding it to be 12.63%, based on the average market return of 12.93%, a risk free rate of 7%, and a beta of 0.95 for Coal India as a low risk security.

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    © All Rights Reserved
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    8 views1 page

    Expected Return Calculation

    Uploaded by

    vanisha
    This document shows historical share prices and market index returns for various dates going back to 2012. It then calculates the average expected return on the market index as 13%. Finally, it uses the Capital Asset Pricing Model to calculate the expected return on Coal India Ltd stock, finding it to be 12.63%, based on the average market return of 12.93%, a risk free rate of 7%, and a beta of 0.95 for Coal India as a low risk security.

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    © All Rights Reserved
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    of 1

    Date Adj Close Share Adj Close Nifty50 % Change in Share % Change in Nifty50

    4/1/2023 233.100006 18065 41% 6%


    4/1/2022 165.362732 17102.55078 54% 17%
    4/1/2021 107.479454 14631.09961 -2% 48%
    4/1/2020 109.192619 9859.900391 -36% -16%
    4/1/2019 170.06813 11748.15039 -7% 9%
    4/1/2018 182.047211 10739.34961 9% 15%
    4/1/2017 166.846268 9304.049805 2% 19%
    4/1/2016 163.423508 7849.799805 -13% -4%
    4/1/2015 188.121368 8181.5 31% 22%
    4/1/2014 143.416107 6696.399902 3% 13%
    4/1/2013 139.674103 5930.200195 -6% 13%
    4/1/2012 149.298004 5248.149902
    Average Expected Return on Market Index = 13%

    CAPM MODEL USED TO CALCULATE EXPECTED RETURN


    ON COAL INDIA LTD. STOCK
    Expected Return on Market Index = 12.93%
    Risk free rate of return taken from govt security
    (Bond as on 3rd may 2023) as these are 7%
    consifered
    Beta = as low risk security = 0.95
    Expected Return = Ke = 12.63%

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