Risk and Return/Cost of Capital

Using spreadsheets to solve complex problems is a key competence - in fact a requirement - for many middle management positions in the workplace. Corporate finance provides many opportunities to use MS Excel to solve problems that cannot easily be solved manually.

In this assignment, you will be applying the basic calculation tools to analyze the cost of capital for a corporation and apply calculate the weighted average cost of capital.

Question 1:

Find the following Betas for the companies listed below: (use www.globeinvestor.com)

Assuming a risk free rate (R_f) of 2% and the Return from the market (R_m) of 6.5% calculated the expected return of each company based on the Capital Asset Pricing Model.

Company	Stock Symbol	Beta	Expected Return
TD Bank	TD-T
Royal Bank	RY-T
Canadian Tire Corporation	CTC.A-T
Suncor Energy	SU-T
Sierra Wireless	SW-T
Twitter	TWTR-N
Facebook	FB-Q
Microsoft	MSFT-Q
Apple	AAPL-Q
Amazon	AMZN-Q
Alphabet Inc. (Google)	GOOGL-Q
Starbucks	SBUX-Q

Re-order your list from the lowest beta to the highest and compare their expected return.