.The annual (%) returns for years 2007-2021 (15-years) for both FedEx stock (FDX) and the NYSE Index, are shown below:

Year	FDX	Stock Mkt			(FDX-MEAN)(MKT-MEAN)
2021	-8.01	28.26
2020	71.69	-2.01
2019	-27.74	5.46
2018	0.56	7.7
2017	26.68	28.91
2016	7.06	3.75
2015	-3.88	-2.12
2014	25.33	8.11
2013	15.04	9.87
2012	11.93	4.29
2011	-2.68	6.78
2010	123.17	57.05
2009	-50.49	-45.24
2008	-25.07	-3.86
2007	-2.29	8.73
Mean				SUM
Variance				COV
Std. Dev.				BETA

1. Calculate the Mean, Variance, Standard Deviation for FDX and the Stock Market. Also, calculate Covariance (COV) between FDX and the Market and the Beta for FDX stock using the formula Beta=COV/Market Variance. (Hint: you may want to use Excel to calculate these parameters).

1. Using Regression Analysis, calculate the estimated beta () for FDX to show that you obtain the same Beta as in part a. Please copy and paste your regression output here:

1. Using the US Treasury Bond yield curve for Friday, 11/5/21 (given below) and the parameters for the Capital Asset Pricing Model (CAPM) that were defined by Pablo Fernandez for 2021 (use 10-year Treasury rate for risk free rate and a Market Risk Premium of 5.5%), calculate the minimum required rate of return that investors require for FDX stock as estimated by the CAPM.

1. The FDX stock price closed at $242.77 on 11/5/2021. Its EPS is $18.84 and it is expected to pay a dividend (D₁ =$3.00 per share), thus has a payout ratio of 15.92%. FDX has a minimum required rate of return of 12% on reinvested retained earnings. You may estimate the growth rate of FDX using: g = (return on reinvested capital)*(1- payout ratio). Using the DCF model: r = D₁/P₀ + g, what is the estimate for the cost of reinvested retained earning using the DCF model? Stock parameters for FDX may be found at:

https://finance.yahoo.com/quote/FDX/

g =

r_FDX = D₁/P₀ + g =

1. Please explain why there are differences between the CAPM and the DCF model in estimating the cost of reinvested retained earnings.