Goto http: //finance.yahoo.com/and enter the ticker symbol for Coca-Cola at the top of the page (KO). Under "Stock Research", find the segment of the website that lets you download historical prices/quotes. Note that you can download data at many frequencies (i.e.: daily, weekly, monthly.) Download monthly stock price data for Coke for the last 5 years (60 months). Your section faculty will give you specific dates. Do the same for the S&P 500 (ticker symbol ^GSPC), for the identical time period and frequency. a) Combine these data sets and use the prices to calculate monthly returns over that 5 year time frame. Using the Excel regression analysis package, run a regression of Coke's equity returns on the "market's" (S&P500) returns, to estimate Coke's beta. b) Compare the beta you've calculated to the beta that Yahoo has calculated for Coke. Why are there differences? c) Use this beta, and your best estimate of the other inputs to the CAPM equation, to calculate Coke's required return on equity. i. What other uses can this beta be put to? What assumptions are you making for these uses? d) You can use the "Analysts' Estimates" information presented on Yahoo, along with current information on Coke presented in "Key Statistics", to forecast dividend cash flows, as well as resale value. Ultimately you will be calculating a value (share price) of Coke and comparing it to the market price on the date given by your Section faculty. Would you recommend that investors purchase Coke? Why or why not? What caveats would you apply to your recommendation