can beat the market. Technical analysis methods include Fibonacci analysis‚ moving average analysis‚ and relative strength index analysis‚ beta analysis among others. In this model we attempt to predict ZSE stock movements using CAPM (beta) analysis. MODEL DEVELOPMENT The CAPM model asserts that the value of a stock is a function of the risk free rate‚ beta of a stock and stock market risk premium. Estimating risk free rate In developed economies the risk free rate is easy to estimate‚ it is treasury
Premium Stock market Technical analysis Stock
The rate of return on equity represents the percentage return a company needs to achieve to be worth investing in. Using the Capital Asset Pricing Model (CAPM)‚ as it’s the most widely used and best known model of risk and return‚ we can determine the required rate of return on equity of Naturally Fresh Plc. The basic principle of CAPM is to compensate investors by considering the risk and time value of money. It represents this by incorporating the following factors: 1. A risk- free rate(rf)
Premium Net present value
| NIKE‚ INC.: COST OF CAPITAL | | | | | | Introduction Our report aims to help Kimi Ford make a decision on her investment of Nike. We choose WACC as our method to estimate the cost of capital‚ which can be used as a discount rate to verify whether Nike is correctly valued in current market. We have mainly four steps to calculate WACC: I. Identify the type of cost of capital; II. Figure out the weights of debt and equity; III. Calculate the cost of debt and equity respectively;
Premium Dividend yield Stock Ratio
Cost of Capital Estimate for Midland Energy Resources‚ Inc. In the first section of my report‚ I list out the main models and methods applied to estimate the cost of capital for Midland’s three divisions‚ general assumptions made and the corresponding justifications. In the second section‚ Calculations‚ I not only compute the cost of capital based on the general assumptions previously made‚ but also discuss specifics of each division and the additional adjustments or assumptions made to justify
Premium Weighted average cost of capital
2FIM602 Finance Major Project MERGERS AND ACQUISITIONS: DO THEY CREATE VALUE FOR SHAREHOLDERS Author: Emad Ahmed Student number: 12242676 Supervisor: Dr Abdelhafid Benamraoui A project undertaken as part of BA (Hons) Finance degree‚ University of Westminster‚ London 1 Major Project Table of Contents Statement .......................................................................................................
Premium Stock market Mergers and acquisitions
CHAPTER 6 Four factors affect interest rate level: production opportunities‚ time preferences for consumption‚ risk and expected inflation Different Consumption preferences: borrow or lend to achieve the individual consumption desired “Real” rates r* represents the “real” risk-free rate of interest. Like a T-bill rate‚ if there was no inflation. From 1% to 4% per year. rRF = rate of interest on Treasury securities. (no risk of default); rRF =r* + IP= avg. inflation rate expected over life of
Premium Bond Investment Stock market
NBL’s beta was 1.074 indicating the company’s stock price is .074% more volatile than the market. Whereas XOM’s Beta was 0.8444 which indicates the firm’s stock is 15.56% less volatile than the market. Furthermore‚ the Capital Asset Pricing Model (CAPM) is used to determine an investor’s required rate of return from investing in a company’s common stock (Shapiro‚ 2014). Through using a risk free rate of return of 2.86% and a return on the market portfolio of 2.725%‚ as well as the beta for each
Premium Economics Peak oil United States
CAPM Exam Prep | Project Management Institute http://www.pmi.org/Certification/Certified-Associate-in-Project-Management-CAPM/CAPM-Exam-Prep.aspx Successful CAPM candidates typically use multiple study aids — including courses‚ self-study and study groups — and will spend many hours to prepare‚ ... Certified Associate in Project Management (CAPM)‚ Online Study ... http://courses.telegraph.co.uk/courses/online-study/certified-associate-in-project-management-capm/149548/ Certified Associate in
Premium Project management
skills and critical thinking. LEARNING OUTCOMES On successfully completing this subject‚ students will be able to: • • • • • • Describe the major function of financial managers; Compare investment appraisal techniques and understand the limitations of those techniques; Evaluate the various sources of finance available in Hong Kong; Examine the factors affecting capital structure and dividend policy and their effect on the cost of capital; Interpret the key characteristics of working capital
Premium Finance Net present value Investment
1) Why are we computing the Cost of Capital? Why is it important? A “Firm” will want to know the overall or average required rate of return on its aggregate investments. The Cost of capital allows us to set a benchmark that new projects need to meet in order to be viable. In the case of a “Project” it is a way to calculate the minimum required rate of return for an investment depending on its riskiness of its cash flow therefore it is a way to; a) Evaluate the Investment Decision
Premium Risk Interest Investment