Corporate Finance

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Author’s Note:

CORPORATE FINANCE1
Table of Contents
Question 1........................................................................................................................................2
References........................................................................................................................................6

CORPORATE FINANCE2
Question 1
a) The market price index for the All-Ordinaries Index and RHP Company was taken for a
different time periods. The two sub-periods taken into consideration was from the Period
1: June 2012 to July 2014; Period 2: February 2016 to January 2018. The data undertaken
will be considered for the purpose of calculating the risk and return generated along with
the monthly risk free data period for two different set of data period taken into
consideration for the purpose of analysis.
b) The return for share prices and market return (from market price index) was
calculated for both the sub Period 1: June 2012 to July 2014; Period 2: February 2016 to
January 2018. The return for the share prices was calculated with the help of new price –
old price divided by the old share price of the company. The return evaluated for the
stock was as follows:
Particulars
June12-
July14
Feb16-
Jan18
Return on Market Index (rm) 1.23% 0.84%
Return on Share Price (rj) 11.08% 0.12%
Risk Free Rate 0.53% 5.44%
(rj-rm) 9.85% -0.72%
(rm-rf) 0.70% -4.60%
c) The mean, standard deviation, variance and correlation coefficient for and
separately for the two sub-period was calculated as follows for the period June