Question
Valuate the stock using dividend discount model and multi period dividend discount model. 1.Collect data for stock (you are assigned) price, market price (S&P 500
Valuate the stock using dividend discount model and multi period dividend discount model.
1.Collect data for stock (you are assigned) price, market price (S&P 500 Index), risk-free rate (using 3-month T-bill rate). Hint: Collect adjusted stock price (Pi) and the S&P 500 Composite Index Price (Pm) from Yahoo Finance (use monthly frequency data series more than 10 years), collect three-month T-bill rate (Rf=TB3MS) from Economic data-FRED @ http://research.stlouisfed.org/fred2/categories/116 (Attention: TB3MS is an annualized time series). Construct stock returns and market returns using stock price and market price. Provide descriptive statistics for the risk-free rate, stock returns and market returns (including mean, median, standard deviation, maximum, and minimum).
2.Run the regression of the stock (you are assigned) return on market return in Excel (Hint: click on Tools in the menu bar, choose Data Analysis and then double lick regression.If it does not show Data Analysis in the drop-down list, click Add-ins on the drop-down list.When the Add-Ins dialog box pops up, click the box in front of Analysis ToolPak, and then click the OK button.The Data Analysis add-in will be installed.Report your results: interpret the coefficients, t-statistics and R2. Discuss the estimated beta.
What are the formulas to calculate this questions? The company that i need to use is NRG energy
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