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How do I estimate the beta of the firm’s stock on the basis of weekly returns over...

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undeadable | (Level 1) Honors

Posted July 24, 2013 at 9:27 AM via web

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How do I estimate the beta of the firm’s stock on the basis of weekly returns over the last 102 weeks if I download data on the daily time series of the price of the firm’s stock and on S&P 500, with the weekly returns computed so that the number of missing observations are minimized? Then how can I find the following?

   (vi).          The Cost of equity capital for the firm, r, computed using your own estimate of beta by assuming (a) that the CAPM holds, and that (EMRf), the equity risk premium is 6%.

   (vii).        The present value of the firm’s assets in place, and

   (viii).      The present value of its growth opportunities.

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