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Corporate Financial Management : Assignment

   

Added on  2020-07-23

19 Pages2973 Words56 Views
Corporate Financial Management

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3PART A...........................................................................................................................................3a. Calculating monthly logarithmic returns of the portfolio that include equally weighted 5random companies.......................................................................................................................3b. Creating an equally weighted portfolio by doing technical analysis and assessing monthlyreturns..........................................................................................................................................5c. Hypothesis framing..................................................................................................................6d. Testing monthly logarithmic returns of both the portfolios by taking into accountindependent sample t- test.........................................................................................................13e. Discussion of findings derived through statistical evaluation...............................................14f. Critically evaluating findings in the empirical study on WFME and random walk theory...14PART B.........................................................................................................................................14Assessing whether Bayer’s should support the deal pertaining to Monsanto’s acquisition......14CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18

INTRODUCTION Corporate finance field is highly associated with the measurement of risk and therebydevelopment as well as execution of competent strategic framework. In the recent times, highlevel of emphasis is placed by the investors on the development and management of portfolio.Hence, with the motive to diversify risk level now investors make focus on investing money invaried securities rather than any one. Efficiency market hypothesis can be divided into threeparts such as weak, strong and semi-strong. On the basis of weak from efficiency, pastmovements do not have significant impact on the price level of stock. In this, the present reportwill provide deeper understanding about the random walk theory related to WFMs. Further, italso depicts the manner in which proposed merger and acquisition plan will impact the wealth ofBayer’s shareholders. PART Aa. Calculating monthly logarithmic returns of the portfolio that include equally weighted 5random companies Months Portfolio A (Random)10.001820.00930.01540.00750.0176-0.02270.01180.0199-0.009100.043110.005120.00213-0.024

14-0.006150.00116-0.023170.01018-0.002190.005200.00521-0.006220.00523-0.006240.00925-0.009260.012270.01528-0.008290.01030-0.0038.3%

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