Expected Return Analysis of Boral Limited using CAPM Model
Added on 2019-09-30
10 Pages1857 Words166 Views
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Asus[COMPANY NAME] | [COMPANY ADDRESS][Document title][DOCUMENT SUBTITLE]
Table of ContentsSolution –A...........................................................................................................................................2Solution –B............................................................................................................................................3Solution –C............................................................................................................................................4Solution –D...........................................................................................................................................4Solution – E...........................................................................................................................................5Solution –F............................................................................................................................................5Risk and Return Estimation...................................................................................................................6Risk and Return analyses.......................................................................................................................7References.............................................................................................................................................91 | P a g e
Solution –AFacts of the case Boral Ltd, Enter into the large contract of sales with the consumers, where the term ofsales contract required the consumers to make payment in monthly instalments of $2910000. But looking toward the financial condition of Boral Limited, themanagement of the are looking for fund now, to make an investment. As the salesamount is realised over a period of 4 years in monthly instalment, the Boral Ltd,executed another contract with the bake to pay now and realisation the monthlypayment of consumers, bank agree to pay at the rate of 7 % discounting rate. Here is a present value of amount realised from customers over a period of 4 years. MonthsPayments (000)Dis Rate PV 1 $ 29.10 0.9942 $ 28.93 2 $ 29.10 0.9885 $ 28.77 3 $ 29.10 0.9828 $ 28.60 4 $ 29.10 0.9771 $ 28.43 5 $ 29.10 0.9715 $ 28.27 6 $ 29.10 0.9659 $ 28.11 7 $ 29.10 0.9603 $ 27.95 8 $ 29.10 0.9548 $ 27.78 9 $ 29.10 0.9493 $ 27.62 10 $ 29.10 0.9438 $ 27.46 11 $ 29.10 0.9384 $ 27.31 12 $ 29.10 0.9330 $ 27.15 13 $ 29.10 0.9276 $ 26.99 14 $ 29.10 0.9222 $ 26.84 15 $ 29.10 0.9169 $ 26.68 16 $ 29.10 0.9116 $ 26.53 17 $ 29.10 0.9064 $ 26.38 18 $ 29.10 0.9011 $ 26.22 19 $ 29.10 0.8959 $ 26.07 20 $ 29.10 0.8908 $ 25.92 21 $ 29.10 0.8856 $ 25.77 22 $ 29.10 0.8805 $ 25.62 23 $ 29.10 0.8755 $ 25.48 24 $ 29.10 0.8704 $ 25.33 25 $ 29.10 0.8654 $ 25.18 26 $ 29.10 0.8604 $ 25.04 27 $ 29.10 0.8554 $ 24.89 28 $ 29.10 0.8505 $ 24.75 29 $ 29.10 0.8456 $ 24.61 30 $ 29.10 0.8407 $ 24.46 2 | P a g e
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