Hello Mary,

Your previous answer was perfect! I need another part done for me having to do with the same assignment.

Using Microsoft and Apple again I will need the following completed.

• Compute beta of each stock using regression analysis. Use data from 1/1/1996 - 1/1/2013.
• Compute each stocks required rate of return using the Capital Asset Pricing Model (CAPM) and beta from above.
• ComputetheintrinsicstockpriceusingtheGordonGrowthModelandtherequiredrateofreturn

I have attached the previous calculations to use that you did. Thanks!

Microsoft and Apple incorporations Revenue, Price and Income trend analysis Microsoft Inc. Rev Year Revenue (Billions) 2016 $ 85.32 2015 $ 93.58 2014 $ 86.83 2013 $ 77.85 2012 $ 73.72 2011 $ 69.94 2010 $ 62.48 2009 $ 58.44 2008 $ 60.42 2007 $ 51.12 Net Income Net Income (Billions) $ 16.80 $ 12.20 $ 22.10 $ 21.90 $ 17.00 $ 23.20 $ 18.80 $ 14.60 $ 17.70 $ 14.10 Share price Price(Dollars) $ 62.99 $ 56.19 $ 47.44 $ 37.58 $ 26.77 $ 26.12 $ 27.92 $ 30.99 $ 19.68 $ 35.99 Apple Inc. Rev Revenue (Billions) $ 215.60 $ 233.70 $ 182.80 $ 170.90 $ 156.50 $ 108.20 $ 65.20 $ 42.90 $ 37.50 $ 24.60 Microsoft Inc. Trend Analysis 100 90 250 80 70 200 60 150 50 40 100 30 20 50 10 0 Year 2016 2015 2014 2013 Microsoft Inc. Rev 2012 2011 Net Income 2010 2009 Share price 2008 2007 0 Year 2016 2015 A Net Income Net Income (Billions) $ 45.69 $ 53.40 $ 39.50 $ 37.00 $ 41.70 $ 25.90 $ 14.00 $ 8.20 $ 6.10 $ 3.50 Share price Price (Dollars) $ 177.20 $ 107.03 $ 113.13 $ 80.18 $ 76.49 $ 58.04 $ 46.21 $ 30.48 $ 12.53 $ 28.64 Apple Inc. Trend Analysis 250 200 150 100 50 0 Year 2016 2015 2014 Apple Inc. Rev 2013 2012 Net Income 2011 2010 2009 Share price 2008 2007 Key Financial Ratio Average for last 10 years Apple Incorporation Annual Rates (per share) Revenue Growth (%) 31.70 EBITDA Growth (%) 42.50 Operating Income Growth (%) 40.60 EPS without NRI Growth (%) 40.20 Free Cash Flow Growth (%) 42.40 Book Value Growth (%) 32.20 Microsoft Incorporation 9.70 6.80 4.30 4.50 9.50 13.10 Alta Man Z-Score Formula, 1.2X1+1.4X2+3.3X3+0.6X4+1X5 Where, X1 is working capital/total assets, X2 is Retained earnings /total assets, X X5 is Revenue/Total assets APPLE INCORPORATION Microsoft Incorporation 2017 (Today) 2017 (Today) 1.2*0.0866+1.4*0.2996+3.3*0.1953+0.6*3.262+1*0.6703 =3.80 1.2*0.4663+1.4*0.0044+3.3*0.0956 2016 1.2*0.0302+1.4*0.3178+3.3*0.2523+0.6*3.598+1*0.805 =4.28 2016 1.2*0.4193+1.4*0.0521+3.3*0.1106 2015 1.2*0.0977+1.4*0.4436+3.3*0.236+0.6*5.479+1*0.8006 =5.61 2015 1.2*0.3993+1.4*0.1064+3.3*0.1647 s Retained earnings /total assets, X3 is EBIT/Total assets X4 is Market value of equity/Book value of total liabilities and icrosoft Incorporation 2*0.4663+1.4*0.0044+3.3*0.0956+0.6*3.4186+1*0.4018= 3.33 2*0.4193+1.4*0.0521+3.3*0.1106+0.6*3.754+1*0.5364= 3.73 2*0.3993+1.4*0.1064+3.3*0.1647+0.6*4.8147+1*0.5394= 4.6 References "Income Statement For Apple Inc (AAPL) From Morningstar.Com". Financials.Morningstar.Com, 2017, http://financials.mor www.gurufocus.com/financials/AAPL www.nasdaq.com Quotes Symbol Company Financials investor.apple.com/secfiling.cfm?filingid=1193125-15-356351 https://www.statista.com ... Consumer Electronics https://www.microsoft.com/en-us/Investor/earnings/.../yearly-income-statements.aspx https://www.microsoft.com/investor/reports/ar16/index.html www.gurufocus.com/financials/MSFT&affid=45223 revenuesandprofits.com R&P Comparison https://www.statista.com Industries Technology & Telecommunications Software financials.morningstar.com/ratios/r.html?t=MSFT 017, http://financials.morningstar.com/income-statement/is.html?t=AAPL. Date Microsoft Inc. S&P Return on security, Microsoft. Return on Market 1/2/1996 92.5 636.02 2/1/1996 98.6875 640.43 0.0668918919 0.0069337016 3/1/1996 103.125 645.5 0.0449651678 0.0079165671 4/1/1996 113.25 654.17 0.0981818182 0.0134314222 5/1/1996 118.75 669.12 0.0485651214 0.0228534057 6/3/1996 120.125 670.63 0.0115789474 0.0022567103 7/1/1996 117.875 639.95 -0.0187304891 -0.0457480172 8/1/1996 122.5 651.99 0.0392364793 0.0188139351 9/3/1996 131.875 687.33 0.0765306122 0.0542033276 10/1/1996 137.25 705.27 0.0407582938 0.0261010032 11/1/1996 156.875 757.02 0.1429872495 0.0733761517 12/2/1996 82.625 740.74 -0.4733067729 -0.0215054154 1/2/1997 102 786.16 0.2344931921 0.0613170392 2/3/1997 97.5 790.82 -0.0441176471 0.00592759 3/3/1997 91.6875 757.12 -0.0596153846 -0.0426140104 4/1/1997 121.5 801.34 0.3251533742 0.0584055794 5/1/1997 124 848.28 0.0205761317 0.0585768842 6/2/1997 126.375 885.14 0.0191532258 0.0434526156 7/1/1997 141.375 954.31 0.118694362 0.0781458095 8/1/1997 132.1875 899.47 -0.0649867374 -0.0574656318 9/2/1997 132.3125 947.28 0.0009456265 0.0531535899 10/1/1997 130 914.62 -0.0174775626 -0.0344776972 11/3/1997 141.5 955.4 0.0884615385 0.0445868549 12/1/1997 129.25 970.43 -0.0865724382 0.0157315979 1/2/1998 149.1875 980.28 0.1542553191 0.0101501768 2/2/1998 84.75 1049.34 -0.4319229158 0.070449193 3/2/1998 89.5 1101.75 0.0560471976 0.0499457142 4/1/1998 90.125 1111.75 0.0069832402 0.0090764693 5/1/1998 84.8125 1090.82 -0.0589459085 -0.0188262235 6/1/1998 108.375 1133.84 0.2778187178 0.0394382411 7/1/1998 109.9375 1120.67 0.0144175317 -0.011615327 8/3/1998 95.9375 957.28 -0.1273450824 -0.1457967186 9/1/1998 110.0625 1017.01 0.1472312704 0.0623955156 10/1/1998 105.875 1098.67 -0.0380465645 0.0802942284 11/2/1998 122 1163.63 0.1523022432 0.0591259963 12/1/1998 138.6875 1229.23 0.1367827869 0.0563752866 1/4/1999 175 1279.64 0.261829653 0.0410094415 2/1/1999 150.125 1238.33 -0.1421428571 -0.0322825627 3/1/1999 89.625 1286.37 -0.4029975021 0.0387942154 4/1/1999 81.3125 1335.18 -0.0927475593 0.0379440279 5/3/1999 80.6875 1301.84 -0.0076863951 -0.0249704809 6/1/1999 90.1875 1372.71 0.1177381875 0.054438331 7/1/1999 85.8125 1328.72 -0.0485100485 -0.0320460922 8/2/1999 92.5625 1320.41 0.0786598689 -0.006254092 9/1/1999 10/1/1999 11/1/1999 12/1/1999 1/3/2000 2/1/2000 3/1/2000 4/3/2000 5/1/2000 6/1/2000 7/3/2000 8/1/2000 9/1/2000 10/2/2000 11/1/2000 12/1/2000 1/2/2001 2/1/2001 3/1/2001 4/2/2001 5/1/2001 6/1/2001 7/2/2001 8/1/2001 9/4/2001 10/1/2001 11/1/2001 12/3/2001 1/2/2002 2/1/2002 3/1/2002 4/1/2002 5/1/2002 6/3/2002 7/1/2002 8/1/2002 9/3/2002 10/1/2002 11/1/2002 12/2/2002 1/2/2003 2/3/2003 3/3/2003 4/1/2003 5/1/2003 90.5625 92.5625 91.046799 116.75 97.875 89.375 106.25 69.75 62.5625 80 69.8125 69.8125 60.3125 68.875 57.375 43.375 61.0625 59 54.6875 67.75 69.18 73 66.190002 57.049999 51.169998 58.150002 64.209999 66.25 63.709999 58.34 60.310001 52.259998 50.91 54.700001 47.98 49.080002 43.740002 53.470001 57.68 51.700001 47.459999 23.700001 24.209999 25.57 24.610001 1282.71 1362.93 1388.91 1469.25 1394.46 1366.42 1498.58 1452.43 1420.6 1454.6 1430.83 1517.68 1436.51 1429.4 1314.95 1320.28 1366.01 1239.94 1160.33 1249.46 1255.82 1224.38 1211.23 1133.58 1040.94 1059.78 1139.45 1148.08 1130.2 1106.73 1147.39 1076.92 1067.14 989.82 911.62 916.07 815.28 885.76 936.31 879.82 855.7 841.15 848.18 916.92 963.59 -0.0216070223 -0.0285517923 0.022084196 0.0625395416 -0.0163748926 0.0190618586 0.2823075746 0.0578438949 -0.1616702355 -0.0509035487 -0.0868454662 -0.0201080833 0.1888111888 0.0967198283 -0.3435294118 -0.0307957556 -0.103046595 -0.0219150505 0.2787212787 0.0239335496 -0.12734375 -0.0163412762 0 0.0606991052 -0.1360787825 -0.0534829747 0.1419689119 -0.0049494859 -0.166969147 -0.08006861 -0.2440087146 0.0040534455 0.4077809798 0.0346365771 -0.033776868 -0.0922907358 -0.0730932203 -0.0642047105 0.2388571429 0.0768143618 0.0211070111 0.0050901871 0.0552182712 -0.0250353891 -0.0932876438 -0.0107401501 -0.1380873655 -0.0641084066 -0.103067504 -0.081723406 0.1364081351 0.0180991114 0.1042131864 0.0751759043 0.0317707683 0.0075738342 -0.0383396377 -0.0155738326 -0.0842881664 -0.0207662113 0.0337675866 0.0367388936 -0.1334770828 -0.0614176262 -0.0258323393 -0.0090814811 0.0744451188 -0.0724553544 -0.1228519356 -0.079004275 0.0229262609 0.0048814331 -0.1088019516 -0.1100243183 0.2224508129 0.086448801 0.0787357195 0.0570696209 -0.1036754334 -0.0603325727 -0.0820116425 -0.0274146926 -0.5006320797 -0.0170036085 0.021518902 0.0083575686 0.0561751779 0.0810441069 -0.0375439578 0.0508987097 6/2/2003 7/1/2003 8/1/2003 9/2/2003 10/1/2003 11/3/2003 12/1/2003 1/2/2004 2/2/2004 3/1/2004 4/1/2004 5/3/2004 6/1/2004 7/1/2004 8/2/2004 9/1/2004 10/1/2004 11/1/2004 12/1/2004 1/3/2005 2/1/2005 3/1/2005 4/1/2005 5/2/2005 6/1/2005 7/1/2005 8/1/2005 9/1/2005 10/3/2005 11/1/2005 12/1/2005 1/3/2006 2/1/2006 3/1/2006 4/3/2006 5/1/2006 6/1/2006 7/3/2006 8/1/2006 9/1/2006 10/2/2006 11/1/2006 12/1/2006 1/3/2007 2/1/2007 25.639999 26.41 26.52 27.799999 26.139999 25.709999 27.370001 27.65 26.530001 24.93 26.129999 26.23 28.559999 28.49 27.299999 27.65 27.969999 26.809999 26.719999 26.280001 25.16 24.17 25.299999 25.799999 24.84 25.610001 27.379999 25.73 25.700001 27.68 26.15 28.15 26.870001 27.209999 24.15 22.65 23.299999 24.059999 25.700001 27.35 28.709999 29.360001 29.860001 30.860001 28.17 974.5 990.31 1008.01 995.97 1050.71 1058.2 1111.92 1131.13 1144.94 1126.21 1107.3 1120.68 1140.84 1101.72 1104.24 1114.58 1130.2 1173.82 1211.92 1181.27 1203.6 1180.59 1156.85 1191.5 1191.33 1234.18 1220.33 1228.81 1207.01 1249.48 1248.29 1280.08 1280.66 1294.87 1310.61 1270.09 1270.2 1276.66 1303.82 1335.85 1377.94 1400.63 1418.3 1438.24 1406.82 0.0418528224 0.0113222145 0.0300312414 0.0162237024 0.004165089 0.0178732034 0.0482654223 -0.0119443645 -0.0597122324 0.0549614864 -0.0164498859 0.0071285038 0.0645663969 0.050765541 0.0102301421 0.017276387 -0.0405062929 0.0122089733 -0.0603091195 -0.0163589192 0.0481347373 -0.0167907519 0.0038270572 0.0120834502 0.0888295463 0.0179889987 -0.0024509455 -0.0342905194 -0.0417690769 0.0022873498 0.0128205499 0.0093638757 0.0115732007 0.0140142436 -0.0414730083 0.0385949362 -0.0033569565 0.0324582131 -0.0164669916 -0.0252904671 -0.0426179969 0.0189033461 -0.0393481717 -0.0191176557 0.0467521307 -0.0201085819 0.0197628466 0.0299520463 -0.037209265 -0.0001427142 0.03099843 0.0359682872 0.0691135467 -0.0112221049 -0.0602629313 0.0069490247 -0.0011659153 -0.0177407801 0.0770427596 0.0351860959 -0.0552745665 -0.000952349 0.0764818356 0.0254667713 -0.0454706572 0.0004531576 0.012653442 0.0110958105 -0.1124586223 0.0121556527 -0.0621118012 -0.0309169161 0.0286975276 8.659623E-005 0.0326180272 0.0050858788 0.068163012 0.021274193 0.0642022932 0.0245662985 0.0497257404 0.031508003 0.0226402655 0.0164666567 0.0170299722 0.0126157829 0.0334896171 0.0140590427 -0.0871678844 -0.021846176 3/1/2007 4/2/2007 5/1/2007 6/1/2007 7/2/2007 8/1/2007 9/4/2007 10/1/2007 11/1/2007 12/3/2007 1/2/2008 2/1/2008 3/3/2008 4/1/2008 5/1/2008 6/2/2008 7/1/2008 8/1/2008 9/2/2008 10/1/2008 11/3/2008 12/1/2008 1/2/2009 2/2/2009 3/2/2009 4/1/2009 5/1/2009 6/1/2009 7/1/2009 8/3/2009 9/1/2009 10/1/2009 11/2/2009 12/1/2009 1/4/2010 2/1/2010 3/1/2010 4/1/2010 5/3/2010 6/1/2010 7/1/2010 8/2/2010 9/1/2010 10/1/2010 11/1/2010 27.870001 29.940001 30.690001 29.469999 28.99 28.73 29.459999 36.810001 33.599998 35.599998 32.599998 27.200001 28.379999 28.52 28.32 27.51 25.719999 27.290001 26.690001 22.33 20.219999 19.440001 17.1 16.15 18.370001 20.26 20.889999 23.77 23.52 24.65 25.719999 27.73 29.41 30.48 28.18 28.67 29.290001 30.540001 25.799999 23.01 25.809999 23.469999 24.49 26.67 25.26 1420.86 1482.37 1530.62 1503.35 1455.27 1473.99 1526.75 1549.38 1481.14 1468.36 1378.55 1330.63 1322.7 1385.59 1400.38 1280 1267.38 1282.83 1166.36 968.75 896.24 903.25 825.88 735.09 797.87 872.81 919.14 919.32 987.48 1020.62 1057.08 1036.19 1095.63 1115.1 1073.87 1104.49 1169.43 1186.69 1089.41 1030.71 1101.6 1049.33 1141.2 1183.26 1180.55 -0.0106495918 0.0099799829 0.0742734096 0.0432906906 0.0250500994 0.0325492287 -0.0397524262 -0.0178163222 -0.0162877169 -0.0319818783 -0.0089686099 0.0128635715 0.0254089454 0.0357940083 0.2494909114 0.0148223383 -0.0872046431 -0.0440434172 0.0595238131 -0.008628509 -0.0842696677 -0.0611634319 -0.1656440899 -0.0347611928 0.0433822778 -0.0059596236 0.0049330869 0.0475466979 -0.0070126227 0.0106741817 -0.0286016949 -0.0859623849 -0.0650672846 -0.0098593711 0.0610420708 0.0121904645 -0.0219860747 -0.0907914338 -0.1633570939 -0.1694245238 -0.09449176 -0.0748490426 -0.0385755707 0.0078215769 -0.1203704156 -0.0856573429 -0.0555555556 -0.1099311976 0.1374613622 0.0854044616 0.1028850788 0.0939250799 0.0310957058 0.0530814463 0.1378650616 0.0001958265 -0.010517459 0.074141727 0.0480442177 0.0335601892 0.0434076673 0.0357233458 0.0781493421 -0.0197620009 0.0605842048 0.057364062 0.0363821829 0.0177705712 -0.0754593176 -0.0369742462 0.0173882186 0.0285136889 0.0216254273 0.058796426 0.04267668 0.0147592299 -0.1552063472 -0.0819758419 -0.1081395003 -0.053882442 0.1216861799 0.0687778499 -0.0906625374 -0.047449184 0.0434597803 0.0875511029 0.0890159249 0.0368559944 -0.0528683915 -0.0022902498 12/1/2010 1/3/2011 2/1/2011 3/1/2011 4/1/2011 5/2/2011 6/1/2011 7/1/2011 8/1/2011 9/1/2011 10/3/2011 11/1/2011 12/1/2011 1/3/2012 2/1/2012 3/1/2012 4/2/2012 5/1/2012 6/1/2012 7/2/2012 8/1/2012 9/4/2012 10/1/2012 11/1/2012 12/3/2012 27.91 27.73 26.58 25.389999 25.92 25.01 26 27.4 26.6 24.889999 26.629999 25.58 25.959999 29.530001 31.74 32.259998 32.02 29.190001 30.59 29.469999 30.82 29.76 28.540001 26.620001 26.709999 1257.64 1286.12 1327.22 1325.83 1363.61 1345.2 1320.64 1292.28 1218.89 1131.42 1253.3 1246.96 1257.6 1312.41 1365.68 1408.47 1397.91 1310.33 1362.16 1379.32 1406.58 1440.67 1412.16 1416.18 1426.19 0.104908947 0.0653000405 -0.0064493013 0.022645574 -0.0414713307 0.0319565641 -0.0447705418 -0.0010473132 0.0208744002 0.0284953804 -0.0351080247 -0.0135009528 0.0395841663 -0.0182574613 0.0538461538 -0.0214744258 -0.0291970803 -0.0567911075 -0.0642857519 -0.0717619883 0.0699075962 0.1077230385 -0.0394291791 -0.0050587152 0.0148553167 0.0085327639 0.1375193427 0.0435830622 0.0748391102 0.0405894641 0.0163830498 0.0313323145 -0.0074394921 -0.0074974527 -0.0883822299 -0.0626507256 0.0479615948 0.0395549821 -0.036613305 0.0125975741 0.0458093331 0.0197633697 -0.0343932511 0.0242361537 -0.0409945901 -0.0197894099 -0.067273999 0.002846717 0.0033808413 0.0070682305 A Scatter plot sh Y -0.2 SUMMARY OUTPUT Regression Statistics Multiple R 0.4898530709 R Square 0.2399560311 Adjusted R Square 0.2361747178 Standard Error 0.1035008531 Observations 203 ANOVA df Regression Residual Total Intercept X Variable 1 SS MS F Significance F 1 0.679793 0.679793 63.45838 1.20E-013 201 2.153198 0.010712 202 2.832991 Coefficients Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0% Upper 95.0% -0.004701936 0.007308 -0.643396 0.520701 -0.019112 0.009708 -0.019112 0.009708 1.2533251381 0.157333 7.966077 1.20E-013 0.943091 1.56356 0.943091 1.56356 Beta is 1.2533 RESIDUAL OUTPUT Observation Predicted Y 1 0.0039882464 2 0.0052200965 3 0.012132003 4 0.0239408118 5 -0.0018735442 Residuals 0.062904 0.039745 0.08605 0.024624 0.013452 -0.15 6 -0.062039076 0.043309 7 0.0188780418 0.020358 8 0.063232457 0.013298 9 0.0280111075 0.012747 10 0.0872622395 0.055725 11 -0.0316552137 -0.441652 12 0.0721482506 0.162345 13 0.0027272615 -0.046845 14 -0.0581111465 -0.001504 15 0.0684992449 0.256654 16 0.0687139455 -0.048138 17 0.0497583194 -0.030605 18 0.0932401715 0.025454 19 -0.076725057 0.011738 20 0.0619167944 -0.060971 21 -0.0479137006 0.030436 22 0.0511798901 0.037282 23 0.0150148711 -0.101587 24 0.0080195357 0.146236 25 0.0835938086 -0.515517 26 0.0578962831 -0.001849 27 0.0066738311 0.000309 28 -0.0282973152 -0.030649 29 0.0447270029 0.233092 30 -0.0192597174 0.033677 31 -0.1874326284 0.060088 32 0.0734999322 0.073731 33 0.0959328388 -0.133979 34 0.0694021615 0.0829 35 0.0659546278 0.070828 36 0.046696228 0.215133 37 -0.0451624834 -0.09698 38 0.0439198293 -0.446917 39 0.042854268 -0.135602 40 -0.0359980674 0.028312 41 0.0635269927 0.054211 42 -0.044866109 -0.003644 43 -0.0125403468 0.0912 44 -0.040486615 0.01888 45 0.0736804436 -0.051596 46 0.0191887706 -0.035564 47 0.0677952715 0.214512 48 -0.0685006333 -0.09317 49 -0.0299039022 -0.056942 50 0.1165194561 0.072292 51 -0.0432990306 -0.30023 52 -0.0321686197 -0.070878 53 0.0252945834 0.253427 54 -0.0251828683 -0.102161 55 0.0713737784 -0.071374 56 -0.0717334927 -0.064345 57 -0.0109052511 0.152874 58 -0.1050539377 -0.061915 59 0.0003783492 -0.244387 60 0.0387089567 0.369072 61 -0.1203722353 0.086595 62 -0.0851713137 0.012078 63 0.0915714345 0.147286 64 0.0016777235 0.019429 65 -0.0360794185 0.091298 66 -0.0181628361 -0.075125 67 -0.0850506135 -0.053037 68 -0.1071279352 0.00406 69 0.0179821353 0.118426 70 0.0895179146 0.014695 71 0.0047905408 0.02698 72 -0.0242210119 -0.014119 73 -0.0307287507 -0.053559 74 0.0413438429 -0.007576 75 -0.0816781908 -0.051799 76 -0.0160839845 -0.009748 77 -0.0955120531 0.169957 78 -0.1037199799 -0.019132 79 0.0014160868 0.02151 80 -0.1425981799 0.033796 81 0.1036465195 0.118804 82 0.0668248545 0.011911 83 -0.080318266 -0.023357 84 -0.0390614594 -0.04295 85 -0.026012986 -0.474619 86 0.0057728148 0.015746 87 0.0968726804 -0.040698 88 0.0590906963 -0.096635 89 0.0094884801 0.032364 90 0.015631638 0.0144 91 0.0176989991 -0.013534 92 -0.0196721083 0.067938 93 0.0641826765 -0.123895 94 0.0042323971 -0.020682 95 0.0589237927 0.005643 96 0.0169509941 -0.006721 97 0.0105998771 -0.051106 98 -0.0252049807 -0.035104 99 -0.0257462074 0.073881 100 0.0104425559 -0.006615 101 0.0178441282 0.070985 102 -0.047679106 0.045228 103 -0.001835143 -0.039934 104 0.0070340448 0.005787 105 0.0128624678 -0.001289 106 0.0436700677 -0.085143 107 0.0359787585 -0.039336 108 -0.0363991142 0.019932 109 0.0189901028 -0.061608 110 -0.0286625745 -0.010686 111 -0.0299045272 0.076657 112 0.0328377165 -0.013075 113 -0.0048808033 -0.032328 114 0.0403780225 -0.00938 115 -0.0187668822 0.08788 116 0.0040074513 -0.06427 117 -0.0269369016 0.025771 118 0.0393976825 0.037645 119 -0.0058955389 -0.049379 120 0.0272162087 0.049266 121 -0.0041339822 -0.041337 122 0.0092047222 0.003449 123 0.0105330491 -0.122992 124 -0.0434508842 -0.018661 125 -0.0045934028 0.033291 126 0.0016723237 0.030946 127 0.0219615449 0.046201 128 0.0260876235 0.038115 129 0.0347878361 0.014938 130 0.0159361388 0.006704 131 0.0111097418 0.00592 132 0.0129186157 0.020571 133 -0.0320822976 -0.055086 134 0.0078062274 -0.018456 135 0.0495553748 0.024718 136 0.0360928306 -0.011043 137 -0.0270315805 -0.012721 138 -0.0447856281 0.028498 139 0.0114203015 -0.020389 140 0.0401595944 -0.014751 141 0.0138752732 0.235616 142 -0.059902658 -0.027302 143 -0.0155162633 0.07504 144 -0.0813596028 -0.00291 145 -0.0482690127 -0.117375 146 -0.0121712821 0.055554 147 0.0548895357 -0.049956 148 0.0086762842 -0.015689 149 -0.1124407539 0.083839 150 -0.0170589337 -0.048008 151 0.0105766796 0.050465 152 -0.1184931223 0.096507 153 -0.2170459507 0.053689 154 -0.0985121226 0.00402 155 0.0051010429 -0.043677 156 -0.1120584372 -0.008312 157 -0.1424814694 0.086926 158 0.1023376226 0.035124 159 0.1130167277 -0.010132 160 0.0618263749 -0.030731 161 -0.0044565017 0.142322 162 0.0882217542 -0.098739 163 0.0373598928 0.010684 164 0.0400710313 0.003337 165 -0.0294701485 0.107619 166 0.0671938849 -0.00661 167 0.0175703676 0.018812 168 -0.0510426882 -0.024417 169 0.0310349871 -0.013647 170 0.0689891028 -0.047364 171 0.0137961778 0.028881 172 -0.1074443194 -0.047762 173 -0.0722341551 -0.035905 174 0.0814990722 0.040187 175 -0.0641711912 -0.026491 176 0.1050280622 -0.061568 177 0.0414906083 0.047525 178 -0.0075723637 -0.045296 179 0.0771402462 0.027769 180 0.0236803311 -0.03013 181 0.035350029 -0.076821 182 -0.00601456 -0.038756 183 0.0310120406 -0.010138 184 -0.0216230195 -0.013485 185 -0.0275844712 0.067169 186 -0.0316163737 0.085463 187 -0.0758796586 0.046683 188 -0.0946430399 0.030357 189 0.1303100561 -0.060402 190 -0.0110421509 -0.028387 191 0.0059923915 0.008863 192 0.0499218115 0.087598 193 0.0461698597 0.028669 194 0.0345676414 -0.018185 195 -0.014098682 0.006659 196 -0.0832236654 -0.005159 197 0.0448733174 0.003088 198 0.0110869203 -0.0477 199 0.020067992 0.025741 200 0.0256738447 -0.060067 201 -0.0295045009 -0.01149 202 -0.001134074 -0.06614 203 0.0041568549 -0.000776 A Scatter plot showing Beta coefficient 0.6 0.4 0.2 -0.2 Upper 95.0% -0.15 -0.1 -0.05 0 0 0.05 0.1 0.15 -0.2 -0.4 -0.6 X Variable 1 In yellow is line of best fit. Cutting through 1.2533. The point comes out clearly on zooming in. Y Predicted Y Y Predicted Y Date Apple Inc. S&P Return on Security Return on Market 1/2/1996 27.625 636.02 2/1/1996 27.5 640.43 -0.0045248869 0.006934 3/1/1996 24.5625 645.5 -0.1068181818 0.007917 4/1/1996 24.375 654.17 -0.0076335878 0.013431 5/1/1996 26.125 669.12 0.0717948718 0.022853 6/3/1996 21 670.63 -0.1961722488 0.002257 7/1/1996 22 639.95 0.0476190476 -0.045748 8/1/1996 24.25 651.99 0.1022727273 0.018814 9/3/1996 22.1875 687.33 -0.0850515464 0.054203 10/1/1996 23 705.27 0.0366197183 0.026101 11/1/1996 24.125 757.02 0.0489130435 0.073376 12/2/1996 20.875 740.74 -0.1347150259 -0.021505 1/2/1997 16.625 786.16 -0.2035928144 0.061317 2/3/1997 16.25 790.82 -0.022556391 0.005928 3/3/1997 18.25 757.12 0.1230769231 -0.042614 4/1/1997 17 801.34 -0.0684931507 0.058406 5/1/1997 16.625 848.28 -0.0220588235 0.058577 6/2/1997 14.25 885.14 -0.1428570827 0.043453 7/1/1997 17.5 954.31 0.2280700893 0.078146 8/1/1997 21.75 899.47 0.2428571429 -0.057466 9/2/1997 21.6875 947.28 -0.0028735632 0.053154 10/1/1997 17.0312 914.62 -0.2146997579 -0.034478 11/3/1997 17.75 955.4 0.0422049557 0.044587 12/1/1997 13.125 970.43 -0.2605633803 0.015732 1/2/1998 18.3125 980.28 0.3952380952 0.01015 2/2/1998 23.625 1049.34 0.2901023891 0.070449 3/2/1998 27.5 1101.75 0.164021164 0.049946 4/1/1998 27.375 1111.75 -0.0045454545 0.009076 5/1/1998 26.625 1090.82 -0.0273972603 -0.018826 6/1/1998 28.6875 1133.84 0.0774647887 0.039438 7/1/1998 34.625 1120.67 0.2069716776 -0.011615 8/3/1998 31.1875 957.28 -0.0992779783 -0.145797 9/1/1998 38.125 1017.01 0.2224448898 0.062396 10/1/1998 37.125 1098.67 -0.0262295082 0.080294 11/2/1998 31.9375 1163.63 -0.1397306397 0.059126 12/1/1998 40.9375 1229.23 0.2818003914 0.056375 1/4/1999 41.1875 1279.64 0.0061068702 0.041009 2/1/1999 34.8125 1238.33 -0.1547799697 -0.032283 3/1/1999 35.9375 1286.37 0.0323159785 0.038794 4/1/1999 46 1335.18 0.28 0.037944 5/3/1999 44.0625 1301.84 -0.0421195652 -0.02497 6/1/1999 46.3125 1372.71 0.0510638298 0.054438 7/1/1999 55.6875 1328.72 0.2024291498 -0.032046 8/2/1999 65.25 1320.41 0.1717171717 -0.006254 SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA Regression Residual Total Coefficients Intercept X Variable 1 RESIDUAL OUTPUT Observation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 9/1/1999 63.3125 10/1/1999 80.125 11/1/1999 97.875 12/1/1999 102.8125 1/3/2000 103.75 2/1/2000 114.625 3/1/2000 135.8125 4/3/2000 124.0625 5/1/2000 84 6/1/2000 52.375 7/3/2000 50.8125 8/1/2000 60.9375 9/1/2000 25.75 10/2/2000 19.5625 11/1/2000 16.5 12/1/2000 14.875 1/2/2001 21.625 2/1/2001 18.25 3/1/2001 22.07 4/2/2001 25.49 5/1/2001 19.95 6/1/2001 23.25 7/2/2001 18.79 8/1/2001 18.55 9/4/2001 15.51 10/1/2001 17.56 11/1/2001 21.3 12/3/2001 21.9 1/2/2002 24.72 2/1/2002 21.7 3/1/2002 23.67 4/1/2002 24.27 5/1/2002 23.3 6/3/2002 17.72 7/1/2002 15.26 8/1/2002 14.75 9/3/2002 14.5 10/1/2002 16.07 11/1/2002 15.5 12/2/2002 14.33 1/2/2003 14.36 2/3/2003 15.01 3/3/2003 14.14 4/1/2003 14.22 5/1/2003 17.95 1282.71 1362.93 1388.91 1469.25 1394.46 1366.42 1498.58 1452.43 1420.6 1454.6 1430.83 1517.68 1436.51 1429.4 1314.95 1320.28 1366.01 1239.94 1160.33 1249.46 1255.82 1224.38 1211.23 1133.58 1040.94 1059.78 1139.45 1148.08 1130.2 1106.73 1147.39 1076.92 1067.14 989.82 911.62 916.07 815.28 885.76 936.31 879.82 855.7 841.15 848.18 916.92 963.59 -0.0296935479 -0.028552 0.2655479575 0.06254 0.2215288612 0.019062 0.0504469987 0.057844 0.009118541 -0.050904 0.1048192771 -0.020108 0.1848418757 0.09672 -0.086516278 -0.030796 -0.322921958 -0.021915 -0.3764880952 0.023934 -0.0298329356 -0.016341 0.1992620713 0.060699 -0.5774359252 -0.053483 -0.2402912621 -0.004949 -0.1565495208 -0.080069 -0.0984848485 0.004053 0.4537815126 0.034637 -0.1560693642 -0.092291 0.2093150685 -0.064205 0.1549614862 0.076814 -0.2173401726 0.00509 0.1654135923 -0.025035 -0.191828 -0.01074 -0.0127726457 -0.064108 -0.1638815006 -0.081723 0.1321728003 0.018099 0.2129840668 0.075176 0.0281691563 0.007574 0.1287669745 -0.015574 -0.1221682897 -0.020766 0.0907834604 0.036739 0.0253485425 -0.061418 -0.0399670787 -0.009081 -0.2394849888 -0.072455 -0.1388261365 -0.079004 -0.0334207077 0.004881 -0.0169491525 -0.110024 0.1082758621 0.086449 -0.0354698818 0.05707 -0.0754838758 -0.060333 0.00209358 -0.027415 0.045264624 -0.017004 -0.0579614257 0.008358 0.0056577797 0.081044 0.2623066807 0.050899 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 6/2/2003 19.06 7/1/2003 21.08 8/1/2003 22.61 9/2/2003 20.72 10/1/2003 22.89 11/3/2003 20.91 12/1/2003 21.37 1/2/2004 22.56 2/2/2004 23.92 3/1/2004 27.04 4/1/2004 25.78 5/3/2004 28.06 6/1/2004 32.54 7/1/2004 32.34 8/2/2004 34.49 9/1/2004 38.75 10/1/2004 52.4 11/1/2004 67.05 12/1/2004 64.4 1/3/2005 76.89999 2/1/2005 44.86 3/1/2005 41.67 4/1/2005 36.06 5/2/2005 39.76 6/1/2005 36.81 7/1/2005 42.65 8/1/2005 46.89 9/1/2005 53.61 10/3/2005 57.59 11/1/2005 67.82 12/1/2005 71.89 1/3/2006 75.51 2/1/2006 68.49 3/1/2006 62.72 4/3/2006 70.39 5/1/2006 59.77 6/1/2006 57.27 7/3/2006 67.96 8/1/2006 67.85 9/1/2006 76.98 10/2/2006 81.08 11/1/2006 91.66 12/1/2006 84.84 1/3/2007 85.73 2/1/2007 84.61 974.5 990.31 1008.01 995.97 1050.71 1058.2 1111.92 1131.13 1144.94 1126.21 1107.3 1120.68 1140.84 1101.72 1104.24 1114.58 1130.2 1173.82 1211.92 1181.27 1203.6 1180.59 1156.85 1191.5 1191.33 1234.18 1220.33 1228.81 1207.01 1249.48 1248.29 1280.08 1280.66 1294.87 1310.61 1270.09 1270.2 1276.66 1303.82 1335.85 1377.94 1400.63 1418.3 1438.24 1406.82 0.0618384367 0.011322 0.1059810543 0.016224 0.0725806926 0.017873 -0.0835913276 -0.011944 0.1047296282 0.054961 -0.0865006154 0.007129 0.0219990913 0.050766 0.0556855379 0.017276 0.0602836409 0.012209 0.1304347408 -0.016359 -0.0465976349 -0.016791 0.0884407327 0.012083 0.1596578703 0.017989 -0.006146312 -0.034291 0.0664810761 0.002287 0.1235141272 0.009364 0.3522581161 0.014014 0.2795801611 0.038595 -0.0395227574 0.032458 0.1940992486 -0.02529 -0.416644935 0.018903 -0.0711101857 -0.019118 -0.1346291641 -0.020109 0.1026066805 0.029952 -0.0741950993 -0.000143 0.1586525629 0.035968 0.0994137585 -0.011222 0.1433141852 0.006949 0.0742399352 -0.017741 0.1776349243 0.035186 0.0600117812 -0.000952 0.050354751 0.025467 -0.0929678693 0.000453 -0.084245834 0.011096 0.122289507 0.012156 -0.1508736916 -0.030917 -0.0418269366 8.66E-005 0.1866595819 0.005086 -0.0016186139 0.021274 0.1345615073 0.024566 0.0532606679 0.031508 0.130488428 0.016467 -0.0744054953 0.012616 0.0104903352 0.014059 -0.0130642138 -0.021846 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 3/1/2007 4/2/2007 5/1/2007 6/1/2007 7/2/2007 8/1/2007 9/4/2007 10/1/2007 11/1/2007 12/3/2007 1/2/2008 2/1/2008 3/3/2008 4/1/2008 5/1/2008 6/2/2008 7/1/2008 8/1/2008 9/2/2008 10/1/2008 11/3/2008 12/1/2008 1/2/2009 2/2/2009 3/2/2009 4/1/2009 5/1/2009 6/1/2009 7/1/2009 8/3/2009 9/1/2009 10/1/2009 11/2/2009 12/1/2009 1/4/2010 2/1/2010 3/1/2010 4/1/2010 5/3/2010 6/1/2010 7/1/2010 8/2/2010 9/1/2010 10/1/2010 11/1/2010 92.91 99.8 121.19 122.04 131.76 138.48 153.47 189.95 182.22 198.08 135.36 125.02 143.5 173.95 188.75 167.44 158.95 169.53 113.66 107.59 92.67 85.35 90.13 89.31 105.12 125.83 135.81 142.43 163.39 168.21 185.35 188.5 199.91 210.73 192.06 204.62 235 261.09 256.88 251.53 257.25 243.1 283.75 300.98 311.15 1420.86 1482.37 1530.62 1503.35 1455.27 1473.99 1526.75 1549.38 1481.14 1468.36 1378.55 1330.63 1322.7 1385.59 1400.38 1280 1267.38 1282.83 1166.36 968.75 896.24 903.25 825.88 735.09 797.87 872.81 919.14 919.32 987.48 1020.62 1057.08 1036.19 1095.63 1115.1 1073.87 1104.49 1169.43 1186.69 1089.41 1030.71 1101.6 1049.33 1141.2 1183.26 1180.55 0.0980970914 0.00998 0.0741578656 0.043291 0.2143285707 0.032549 0.0070138298 -0.017816 0.0796459679 -0.031982 0.0510019449 0.012864 0.1082465974 0.035794 0.2377011518 0.014822 -0.0406948993 -0.044043 0.0870375695 -0.008629 -0.3166396916 -0.061163 -0.0763888662 -0.034761 0.1478163127 -0.00596 0.212195101 0.047547 0.0850819388 0.010674 -0.1129006517 -0.085962 -0.0507046697 -0.009859 0.0665617251 0.01219 -0.3295582099 -0.090791 -0.0534048937 -0.169425 -0.1386745846 -0.074849 -0.0789899661 0.007822 0.0560046762 -0.085657 -0.0090979588 -0.109931 0.1770239095 0.085404 0.1970128464 0.093925 0.0793133949 0.053081 0.048744644 0.000196 0.147159937 0.074142 0.0295000185 0.03356 0.1018963396 0.035723 0.0169949239 -0.019762 0.0605305252 0.057364 0.0541243899 0.017771 -0.0885968397 -0.036974 0.0653962154 0.028514 0.1484704366 0.058796 0.1110211887 0.014759 -0.0161246737 -0.081976 -0.0208268682 -0.053882 0.0227408302 0.068778 -0.0550048358 -0.047449 0.167215109 0.087551 0.0607225057 0.036856 0.0337895629 -0.00229 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 12/1/2010 1/3/2011 2/1/2011 3/1/2011 4/1/2011 5/2/2011 6/1/2011 7/1/2011 8/1/2011 9/1/2011 10/3/2011 11/1/2011 12/1/2011 1/3/2012 2/1/2012 3/1/2012 4/2/2012 5/1/2012 6/1/2012 7/2/2012 8/1/2012 9/4/2012 10/1/2012 11/1/2012 12/3/2012 322.56 339.32 353.21 348.51 350.13 347.83 335.67 390.48 384.83 381.32 404.78 382.2 405 456.48 542.44 599.55 583.98 577.73 584 610.76 665.24 667.1 595.32 585.28 532.17 1257.64 1286.12 1327.22 1325.83 1363.61 1345.2 1320.64 1292.28 1218.89 1131.42 1253.3 1246.96 1257.6 1312.41 1365.68 1408.47 1397.91 1310.33 1362.16 1379.32 1406.58 1440.67 1412.16 1416.18 1426.19 0.0366704298 0.0653 0.0519593536 0.022646 0.0409348542 0.031957 -0.0133065647 -0.001047 0.0046483457 0.028495 -0.00656904 -0.013501 -0.0349595333 -0.018257 0.1632852649 -0.021474 -0.014469277 -0.056791 -0.0091209361 -0.071762 0.0615231081 0.107723 -0.0557834306 -0.005059 0.059654681 0.008533 0.1271110617 0.043583 0.1883106067 0.040589 0.1052835075 0.031332 -0.025969491 -0.007497 -0.0107023155 -0.062651 0.010852747 0.039555 0.0458219349 0.012598 0.0892003064 0.019763 0.0027960541 0.024236 -0.107600099 -0.019789 -0.0168649447 0.002847 -0.0907428716 0.007068 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 ression Statistics 0.398026 0.158425 0.154238 0.13209 203 df SS MS F Significance F 1 0.660187 0.660187 37.83787 4.08E-009 201 3.507005 0.017448 202 4.167192 Coefficients Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0% Upper 95.0% 0.019472 0.009327 2.087746 0.038081 0.001081 0.037862 0.001081 0.037862 1.235119 0.200792 6.151249 4.08E-009 0.839191 1.631047 0.839191 1.631047 Beta is 1.2351 Predicted Y Residuals 0.028036 -0.03256 0.02925 -0.136068 0.036061 -0.043695 0.047698 0.024097 0.022259 -0.218431 -0.037033 0.084652 0.042709 0.059564 0.086419 -0.171471 0.051709 -0.01509 0.1101 -0.061187 -0.00709 -0.127625 0.095205 -0.298798 0.026793 -0.049349 -0.033162 0.156239 0.091609 -0.160103 0.091821 -0.11388 Y -0.2 -0.15 0.073141 -0.215998 0.115991 0.112079 -0.051505 0.294362 0.085123 -0.087996 -0.023112 -0.191587 0.074542 -0.032337 0.038902 -0.299465 0.032008 0.36323 0.106485 0.183618 0.081161 0.082861 0.030682 -0.035228 -0.003781 -0.023616 0.068183 0.009282 0.005125 0.201846 -0.160605 0.061327 0.096538 0.125907 0.118645 -0.144874 0.092499 -0.23223 0.089102 0.192699 0.070123 -0.064016 -0.020401 -0.134379 0.067387 -0.035071 0.066337 0.213663 -0.01137 -0.03075 0.086709 -0.035646 -0.020109 0.222538 0.011747 0.15997 -0.015793 -0.0139 0.096715 0.168833 0.043015 0.178514 0.090916 -0.040469 -0.0434 0.052519 -0.005364 0.110184 0.138932 0.04591 -0.018565 -0.067951 -0.007596 -0.315326 0.049032 -0.425521 -0.000712 -0.029121 0.094442 0.10482 -0.046586 -0.53085 0.013358 -0.25365 -0.079423 -0.077127 0.024478 -0.122963 0.062252 0.39153 -0.094518 -0.061551 -0.059829 0.269144 0.114347 0.040615 0.025759 -0.243099 -0.01145 0.176864 0.006206 -0.198034 -0.05971 0.046937 -0.081466 -0.082415 0.041826 0.090347 0.112323 0.100661 0.028826 -0.000657 0.000236 0.128531 -0.006177 -0.115991 0.064849 0.025935 -0.056386 0.081735 0.008255 -0.048222 -0.070019 -0.169466 -0.078108 -0.060718 0.025501 -0.058921 -0.116421 0.099472 0.126246 -0.01797 0.089959 -0.125429 -0.055046 -0.020438 -0.014389 0.016482 -0.00153 0.046794 0.029794 -0.087756 0.119571 -0.113913 0.082338 0.179969 0.033456 0.028383 0.03951 0.066471 0.041547 0.031034 0.004719 -0.08831 0.087356 0.017374 0.028276 -0.114777 0.082173 -0.060174 0.04081 0.014876 0.034551 0.025732 -0.000734 0.131168 -0.001267 -0.045331 0.034396 0.054045 0.04169 0.117968 -0.022881 0.016735 0.022297 0.044184 0.031037 0.092477 0.036781 0.315477 0.067141 0.212439 0.059561 -0.099084 -0.011765 0.205864 0.04282 -0.459464 -0.004141 -0.066969 -0.005365 -0.129264 0.056466 0.046141 0.019295 -0.09349 0.063897 0.094756 0.005611 0.093803 0.028055 0.11526 -0.00244 0.07668 0.062931 0.114704 0.018295 0.041716 0.050926 -0.000571 0.020031 -0.112999 0.033176 -0.117422 0.034485 0.087804 -0.018714 -0.132159 0.019579 -0.061406 0.025753 0.160906 0.045748 -0.047366 0.049814 0.084748 0.058388 -0.005127 0.03981 0.090679 0.035054 -0.109459 0.036836 -0.026346 -0.007511 -0.005553 0.031798 0.066299 0.072941 0.001217 0.059674 0.154655 -0.002534 0.009547 -0.02003 0.099676 0.03536 0.015642 0.063682 0.044565 0.037779 0.199922 -0.034927 -0.005768 0.008814 0.078223 -0.056072 -0.260567 -0.023463 -0.052926 0.012111 0.135706 0.078197 0.133998 0.032656 0.052426 -0.086702 -0.026199 0.007294 -0.057999 0.034528 0.032033 -0.092667 -0.236892 -0.189788 0.136383 -0.072976 -0.065699 0.029132 -0.108122 -0.086325 0.14233 -0.116306 0.107209 0.124956 0.052068 0.13548 0.061533 0.085034 -0.00572 0.019714 0.029031 0.111045 0.036114 0.060922 -0.031422 0.063594 0.038302 -0.004937 0.021932 0.090323 -0.029793 0.04142 0.012704 -0.026196 -0.062401 0.054689 0.010707 0.092092 0.056378 0.037701 0.07332 -0.081778 0.065654 -0.04708 0.026253 0.10442 -0.08168 -0.039134 -0.015871 0.127608 0.039607 0.064993 -0.004271 0.016643 0.017147 0.100125 -0.063455 0.047442 0.004518 0.058942 -0.018007 0.018178 -0.031485 0.054667 -0.050018 0.002796 -0.009365 -0.003078 -0.031881 -0.007052 0.170337 -0.050672 0.036203 -0.069163 0.060042 0.152522 -0.090999 0.013224 -0.069007 0.030011 0.029644 0.073302 0.053809 0.069604 0.118706 0.058171 0.047113 0.010211 -0.036181 -0.057909 0.047207 0.068327 -0.057474 0.035031 0.010791 0.043882 0.045319 0.049406 -0.04661 -0.004971 -0.102629 0.022988 -0.039853 0.028202 -0.118945 Scatter graph showing line of best fit for the Beta coefficient 0.6 0.4 0.2 Y -0.2 -0.15 -0.1 0 -0.05 -0.2 -0.4 -0.6 -0.8 X Variable 1 0 0.05 0.1 0.15 cient 0.1 0.15 Y Predicted Y To obtain required rate of return, CAPM formula is rate of return =Risk free asset return + Beta*(Return on market-Risk free asset return) rr=rf+Beta(rm-rf) a) Microsoft incorporation Risk free return of LT securities is 2.96% The annualized return on the market for the security is 14.15% Beta calculated is 1.2533 Therefore, the return is: 2.96%+ 1.2533*{14.15%-2.96%} 16.98% b) Apple incorporation Risk free return of LT securities is 2.96% The annualized return on the market for the security is 14.15% Beta calculated is 1.2351 Therefore, the return is: 2.96%+ 1.2251*{14.15%-2.96%} 16.78% The gordon growth model seeks to determine the actual/real value for a stock. This is what is normally refered to as intrinsic value. According to the model, Value of stock =D/(K-g) Where, D=Expected next years dividend per share k=Rate of return g=growth rate Microsoft Incorporation Dividend =0.39 Rate of return (Calculated)= 16.98% Growth=16.10% $0.39/(16.98%-16.10%) $44.32 Apple Incorporation Dividend =0.57 Rate of return (Calculated)= 16.78% Growth=10.10% $0.57/(16.78%-10.10%) $8.53