Estimate of beta for british petroleum. please consider, Ask an Expert

Finance

Please find an estimate of beta for British Petroleum (BP). Please consider examining or using an industry average beta, especially if the reported beta you find seems unrealistic or inappropriate.

Note: You should probably check the beta across a few different sources, because sometimes they vary. Please find the current interest rate (yield) for 3-month treasury bills. Determine an appropriate market risk premium. Please also consider the size of BP when estimating an appropriate premium.

Questions:

After making the calculations:

1. Using all this information, what is the expected return for BP using CAPM?

2. Last week I estimated a required rate of return of 10% for BP using the dividend discount model. How does the CAPM number compare?

Please write up a 1-page summary of your findings, including any calculations you might have made.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9219290

Have any Question?Write your Review or question?

Related Questions in Basic Finance

The common shares of twitter inc recently traded on the new

The common shares of Twitter Inc. recently traded on the New York Stock Exchange for $21.10 per share. You have employee stock options to purchase 1000 Twitter shares for $19.90 per share. The options expire in three yea ...

Marlene decides to take the investors offer she buys the

Marlene decides to take the investor's offer. She buys the business and begins paying the $5,000 monthly payments to the investor. Shortly thereafter, she realizes what a bargain she found. She's learned that, because of ...

1 construct an amortization schedule for the 300000 loan

1. Construct an amortization schedule for the $300,000 loan with a 3.5% interest rate compounded monthly. The loan will be paid back in 15 years making monthly payments. Identify the principal and interest payment of ea ...

Small fry inc has just invented a potato chip that looks

Small Fry, Inc., has just invented a potato chip that looks and tastes like a french fry. Given the phenomenal market response to this product, Small Fry is reinvesting all of its earnings to expand its operations. Earni ...

Specifically share one clearly defined financial goal along

Specifically, share one clearly defined financial goal along with several specific objectives to help you achieve it. Remember effective goals and objectives are SMART What are some resources you may need to help you ach ...

Company rapid growth is considering the following

Company Rapid Growth is considering the following project: Year 0 1 2 3 4 5 Cash Flows- $80500 $10000 $26000 $33800 $37200 $59100 What's the payback period of the project?

How to figure out the profit loss of a company what

How to figure out the profit loss of a company, what evidence would show that and what would be some solutions that can help a company detour from profit loss?

The winner of the first annual tom morris golf invitational

The winner of the first annual Tom Morris Golf Invitational won $110 in the competition which was held in 1900. In 2015, the winner received $1,470,000. If the winner's purse continues to increase at the same interest ra ...

Metal ltd is looking at producing power boardsnbspthe

Metal Ltd is looking at producing power boards. The company is considering alternative production methods. The costs (in million) and lives associated with each are: Model Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Model ...

Thsi estimates that a project will initially cost 523

THSI estimates that a project will initially cost $5.23 million to setup and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert