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a. Perform a regression of Tesla stock returns versus market index returns, preferably using monthly data and 5 years of observations. Use regression to evaluate
a. Perform a regression of Tesla stock returns versus market index returns, preferably using monthly data and 5 years of observations. Use regression to evaluate your company's performance on the basis of the risk adjusted during the regression period and its risks, relative to the market, and divide the risks into company-specific and market components. To run the regression, you will need to have data about the past returns of your stock and the market index. What is a regression interception? What tells you about this company's stock performance during a downturn? What is the slope of the slope? What does it tell you about equity risk? How accurate is this risk assessment? (Provide room for appreciation). What part of this company's risk can be attributed to market factors? What is part of the company's factors? Why is this important? How much risk is this company exposed to due to work factors? How much of it is due to leverage? .................................................. ..........B. Depending on your company's business mix, estimate a "bottom-up" trial version of your business. You should be able to find the breakdown by business in your company's financial filings, although the details are richer in some than others. To get the beta for every business, you'll need to find other publicly traded companies that primarily operate in that business, average their beta releases and correct them for leverage and cash holdings. Divide your company by business components, and estimate a business trial version for each component. Attach reasonable weights to each component and estimate an unsupported business trial version. Using the company's current leverage, estimate a free trial for each component.
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