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# BAO2001 Corporate Finance

• Course Code: BAO2001
• University: Victoria University
• Country: Australia

## Questions:

The focus of this assignment is on Risk and Return. The expectation is that students will develop technical skills in measuring returns, risk assessment and analysis.

### Assignment Components

The exhibit contains monthly returns for Financial Ltd, Construction Ltd and the Stock Market index.

Table 1: Monthly Values for the Market Index and Two Traded Shares.

 Month Market index Financial Ltd (\$) Construction Ltd (\$) 1 4650 13.05 8.00 2 4770 13.40 7.60 3 4840 13.87 7.00 4 4940 13.12 7.70 5 4815 13.37 8.10 6 4788 13.00 8.60 7 5055 13.50 8.30 8 5125 13.90 8.90 9 5035 14.12 9.70 10 5115 14.87 10.20 11 5200 15.25 10.65 12 5255 16.05 11.05 13 5305 16.40 11.45 14 5408 16.00 10.95 15 5510 16.25 10.55 16 5430 16.50 11.00 17 5360 17.00 10.55 18 5420 17.35 10.10 19 5490 18.00 10.70 20 5555 18.35 9.45 21 5500 18.55 10.12 22 5575 19.20 10.45 23 5645 18.70 10.05 24 5695 18.20 10.85 25 5770 18.75 11.15

Table 2: Previous 5-year Dividend History for the two Listed Companies

 Financial Ltd Construction Ltd 1.00 0.60 1.03 0.62 1.07 0.66 1.11 0.70 1.15 0.74

Each team is required to make the following calculations using the statistical functions on Excel:

1. Convert the price data into returns on a month to month basis. You should have 24 returns for the market and the two shares after you complete this process.
2. Mean (expected) return and standard deviation for the stock market and the two companies.
3. The coefficient of variation for the market and the two companies.
4. The correlation coefficient between Financial and Construction Ltd.
5. The standard deviation of returns for a portfolio consisting of Financial Ltd and Construction Ltd (assume equal weightings).
6. Beta coefficient calculation for both Financial and Construction Ltd return of market each individual.
7. Assuming a risk-free rate of 3% and utilizing the information in both tables use the dividend valuation model to determine the present value of the two shares.Capital n dividend does the evaluation w3

### Cite This Work

My Assignment Help (2020) Corporate Finance [Online]. Available from: https://myassignmenthelp.com/free-samples/bao2001-corporate-finance/convert-the-price-data-into-returns.html
[Accessed 19 May 2022].

My Assignment Help. 'Corporate Finance' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/bao2001-corporate-finance/convert-the-price-data-into-returns.html> accessed 19 May 2022.

My Assignment Help. Corporate Finance [Internet]. My Assignment Help. 2020 [cited 19 May 2022]. Available from: https://myassignmenthelp.com/free-samples/bao2001-corporate-finance/convert-the-price-data-into-returns.html.

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