leadership
Company Report
This project applies the concepts and theories offered in the financial management class to a real world company. In order to write the Company Report, you need to look up information about your firm. Use financial databases like Bloomberg or Datastream, but you may also consider checking Yahoo Finance, EDGAR,the website of Prof. Kenneth French and Prof. Robbert Shiller or the website of S&P (see also the data guide).
To be precise, each group (of maximum 4 students, as allocated by the MCO) chooses a listed U.S. company to analyze. Each company can be chosen by one group only! Avoid financials, REITs, companies with a life of less than 10 years, and companies that are not making a profit. After choosing the company, send an email to rafael.gorjao@novasbe.pt, isabelsimoesdosreis@gmail.com and dasilva.rui10@gmail.com with the group members and company name. This process will be on a first come, first serve basis.
For the first part of the Company Report, you need to answer the following questions on risk and return of equities. The text for this part may not exceed 5 pages, excluding tables and figures that are put in an orderly appendix.
Risk and Return
1. The historical return since IPO
a. What is the arithmetic and geometric average annualized total return of your stock? Also, plot the cumulative total return of the stock.
b. Compare both the average and cumulative return to the S&P500 and an investment in one month t-bills.
c. Describe why the historical average return on your stock may not be a useful predictor of the future return.
2. Your company’s (systematic) risk
a. Calculate volatility and beta. Present a 95% confidence interval for beta and comment on how your stock’s beta compares to its industry.
b. Comment on whether the stock is more or less risky than the market and decompose your stock’s risk in in systematic and unsystematic risk.
c. How did the company perform relative to the CAPM?
d. Present the Security
This project applies the concepts and theories offered in the financial management class to a real world company. In order to write the Company Report, you need to look up information about your firm. Use financial databases like Bloomberg or Datastream, but you may also consider checking Yahoo Finance, EDGAR,the website of Prof. Kenneth French and Prof. Robbert Shiller or the website of S&P (see also the data guide).
To be precise, each group (of maximum 4 students, as allocated by the MCO) chooses a listed U.S. company to analyze. Each company can be chosen by one group only! Avoid financials, REITs, companies with a life of less than 10 years, and companies that are not making a profit. After choosing the company, send an email to rafael.gorjao@novasbe.pt, isabelsimoesdosreis@gmail.com and dasilva.rui10@gmail.com with the group members and company name. This process will be on a first come, first serve basis.
For the first part of the Company Report, you need to answer the following questions on risk and return of equities. The text for this part may not exceed 5 pages, excluding tables and figures that are put in an orderly appendix.
Risk and Return
1. The historical return since IPO
a. What is the arithmetic and geometric average annualized total return of your stock? Also, plot the cumulative total return of the stock.
b. Compare both the average and cumulative return to the S&P500 and an investment in one month t-bills.
c. Describe why the historical average return on your stock may not be a useful predictor of the future return.
2. Your company’s (systematic) risk
a. Calculate volatility and beta. Present a 95% confidence interval for beta and comment on how your stock’s beta compares to its industry.
b. Comment on whether the stock is more or less risky than the market and decompose your stock’s risk in in systematic and unsystematic risk.
c. How did the company perform relative to the CAPM?
d. Present the Security