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Cost of equity: For this I am sending you to Yahoo finance. //finance.yahoo.com/ In the search box at the top type in Boeing and choose
Cost of equity: For this I am sending you to Yahoo finance. //finance.yahoo.com/ In the search box at the top type in Boeing and choose the Boeing Corp from the drop down menu that will appear I want us to obtain three years of weekly price data (use adjusted prices both for Boeing and for the S&P 500 (symbol GSPC on Yahoo). You will see a choice for historical prices (choose the historical prices" tab). Enter the dates from January 1, 2014 to December 31, 2016. Change the frequency to weekly data. Hit "apply." There is an option to download the data to Excel (choose download data under the "apply" button). Do that. Do the same for the S&P 500 Center AGSPC in the search box). You will want to put both time series in the same excel file Use the adjusted prices (means they adjust for dividends and splits) and calculate weekly returns. Using those returns calculate beta. I want to see a printout of the regression output from Excel (Please read ch. 3 in our custom text about risk and return: "Systemic Risk and the Equity Risk Premium." Section 12.3 discusses measuring systematic risk and there is a box near the end of the section which goes step by step about how to calculate a beta using actual returns in Excel They use monthly returns but we are using weekly returns.) Assume a market risk premium of 6% (the long-term stock market return over long-term Treasury as suggested by Damodaran). I want you to find the yield on a long-term Treasury as of 12-31-16. Go to the U.S. Department of Treasury ov/resource-center/data-chart-center/interest-rates/PagesrTextView.aspx?da http://www.treasu ta yield use long-term or short-term Treasuries is controversial, but because today's short-term returns are so low, it makes sense to use the long-term yield.) You will need weights. On Yahoo you can find a recent balance sheet for Boeing. Use the most recent (which is likely from quarterly reports, not annual reports, and is likely September 30 2016). This will give you the firm's debt financing (use long-term and short-term, but only use debt or bank loans). You will need the firm's market value of equity. Find the number of shares outstanding (this too can be found Yahoo Finance) and the price pershare as of December 31, 2016 (use closing price). Together these will tell you the market value of equity
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