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The attached file contains hypothetical data for working this problem. Goodman Corporations and Landry Incorporateds stock prices and dividends, along with the Market Index, are
The attached file contains hypothetical data for working this problem. Goodman Corporations and Landry Incorporateds stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends.
Data as given in the problem are shown below: | ||||||
Goodman Industries | Landry Incorporated | Market Index | ||||
Year | Stock Price | Dividend | Stock Price | Dividend | Includes Divs. | |
2020 | $30.32 | $2.23 | $85.12 | $3.52 | 18,475.97 | |
2019 | $23.53 | $2.65 | $79.32 | $3.65 | 12,174.55 | |
2018 | $28.61 | $2.73 | $74.32 | $3.45 | 12,019.97 | |
2017 | $15.21 | $2.57 | $87.12 | $3.47 | 10,743.05 | |
2016 | $12.63 | $2.23 | $95.12 | $3.55 | 9,455.42 | |
2015 | $13.21 | $2.25 | $84.25 | $3.25 | 8,163.96 |
d. Estimate Goodmans and Landrys betas as the slopes of regression lines with stock returns on the vertical axis (y-axis) and market return on the horizontal axis (x-axis). (Hint: use Excels SLOPE function.) Are these betas consistent with your graph? | |||||
Goodman's beta = | |||||
Landry' beta = |
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