Instructions:

You are required to participate meaningfully in thediscussions in this course.

Begin bylooking(Links to an external site.)at the table of beta valuesfor real companies shown here. Study these values and think about what they mean. Do any of the values surprise you, given the industry they are associated with?

Create a post comparing two or more companies based on their beta values, and discuss whether these values are surprising or consistent with what you would expect. Given the beta values, what sort of return rates do you expect these companies to offer?

Read through your classmates? posts. We encourage you to respond to at least one of them. You might provide the published return rates for companies already under discussion, as well as other information and opinion. Or you might begin a comparison of two new companies, tying it to the earlier post.

Here is a selection of Large Cap stock betas for us to look at and discuss. These come from ABG Analytics as of02/21/2014(this is not an endorsement in any form for this company or website).

Stock betas are based on weekly returns over the past 250 weeks. The market return is measured using the capitalization-weighted S&P 500 index of large-cap stocks. The second and more novel beta estimate is a time-varying beta which reflects recent market conditions and stock price behavior. Changes over time in the characteristics of a company which affect the way its stock price covaries with the overall market become reflected in the time-varying beta estimates.

Large Cap S HAME509: How to Identify, Measure, and Incorporate Into Capital Budgeting Decisions Ticker AA AAPL ABT AEP AMZN AVP AXP BA BAC CAT CL DOW F GOOG HD IBM INTC JNJ KO LOW MCD MET MSFT PEP PG T TGT TWX VZ WAG WMT WY XOM XRX Large Cap Stock Betas Company Beta Estimate Beta Estimate (long-term average) (current timevarying estimate) Alcoa Inc Apple Inc Abbott Laboratories American Electric Power Amazon.Com Inc Avon Products Inc American Express Co Boeing Co Bank Of America Corp Caterpillar Inc Colgate-Palmolive Co Dow Chemical Co Ford Motor Co Google Home Depot Inc 1.86 1.29 0.35 0.66 1.18 1.02 1.7 1.17 2.29 1.65 0.39 1.29 2.09 0.99 1.02 2.03 1.14 0.34 0.65 1.14 1.1 1.93 1.28 2.13 2.07 0.38 1.8 2.12 0.97 1.03 International Business Machines Corporation Intel Corp Johnson & Johnson Coca-Cola Co Lowe's Companies Inc McDonalds Corp Metlife Inc Microsoft Corp Pepsico Inc Procter & Gamble Co AT&T Inc Target Corporation Time Warner Inc Verizon Communications Walgreen Co Wal-Mart Stores Inc Weyerhaeuser Co Exxon Mobil Corporation Xerox Corp 0.82 1.2 0.46 0.45 1.13 0.54 2.22 0.84 0.43 0.42 0.71 1.1 1.1 0.75 0.6 0.49 1.48 0.71 1.4 0.82 1.07 0.46 0.44 1.13 0.35 1.87 0.76 0.43 0.44 0.57 1.04 1.09 0.34 0.59 0.45 1.49 0.74 1.43