Table of Contents

Answer to part A and B.

Answers to C.

Answers to D..

Answers to E.

Answers to F.

Answers to G..

Corporate Financial Management - Answer to Part A and B

Period 1

Date

S & P Data

Company data

Share Price return ( Rj)

Market Return (Rm)

Risk Free Rate ( Rf)

( Rj-Rf)

(Rm-Rf)

01/02/2014

1859.45

28.28

0.012

0.007

0.335

-0.323

-0.328

01/03/2014

1872.34

28.62

-0.001

0.006

0.330

-0.330

-0.324

01/04/2014

1883.95

28.60

0.001

0.021

0.310

-0.309

-0.289

01/05/2014

1923.57

28.63

0.006

0.019

0.303

-0.297

-0.284

01/06/2014

1960.23

28.80

0.008

-0.015

0.285

-0.276

-0.300

01/07/2014

1930.67

29.04

-0.001

0.038

0.280

-0.280

-0.242

01/08/2014

2003.37

29.02

-0.005

-0.016

0.291

-0.296

-0.307

01/09/2014

1972.29

28.87

0.011

0.023

0.273

-0.262

-0.249

01/10/2014

2018.05

29.18

-0.014

0.025

0.268

-0.282

-0.243

01/11/2014

2067.56

28.77

-0.005

-0.004

0.243

-0.249

-0.248

01/12/2014

2058.90

28.62

0.009

-0.031

0.217

-0.208

-0.248

01/01/2015

1994.99

28.87

0.004

0.055

0.206

-0.202

-0.151

01/02/2015

2104.50

28.98

-0.013

-0.017

0.204

-0.217

-0.222

01/03/2015

2067.89

28.60

0.010

0.009

0.199

-0.189

-0.190

01/04/2015

2085.51

28.87

-0.006

0.010

0.237

-0.243

-0.226

01/05/2015

2107.39

28.70

-0.001

-0.021

0.245

-0.246

-0.266

01/06/2015

2063.11

28.66

0.019

0.020

0.239

-0.220

-0.219

01/07/2015

2103.84

29.20

-0.003

-0.063

0.224

-0.227

-0.286

01/08/2015

1972.18

29.11

-0.014

-0.026

0.222

-0.236

-0.249

01/09/2015

1920.03

28.71

0.003

0.083

0.216

-0.212

-0.133

01/10/2015

2079.36

28.81

-0.003

0.001

0.234

-0.237

-0.234

01/11/2015

2080.41

28.74

0.001

-0.018

0.234

-0.233

-0.252

01/12/2015

2043.94

28.77

0.006

-0.051

0.225

-0.219

-0.275

01/01/2016

1940.24

28.95

0.002

-1.000

0.204

-0.202

-1.204

Period 2

Date

S & P Data

Company data

Share Price return ( Rj)

Market Return (Rm)

Risk Free Rate ( Rf)

( Rj-Rf)

(Rm-Rf)

01/02/2018

2713.83

24.35

0.076

-0.027

0.235

-0.159

-0.262

01/03/2018

2640.87

26.21

0.022

0.003

0.224

-0.202

-0.221

01/04/2018

2648.05

26.78

0.072

0.022

0.226

-0.153

-0.204

01/05/2018

2705.27

28.71

-0.014

0.005

0.230

-0.244

-0.225

01/06/2018

2718.37

28.31

-0.059

0.036

0.222

-0.282

-0.186

01/07/2018

2816.29

26.63

-0.008

0.030

0.217

-0.225

-0.187

01/08/2018

2901.52

26.42

0.031

0.004

0.213

-0.183

-0.209

01/09/2018

2913.98

27.23

0.017

-0.069

0.217

-0.199

-0.286

01/10/2018

2711.74

27.70

0.017

0.018

0.221

-0.203

-0.203

01/11/2018

2760.17

28.17

-0.002

-0.092

0.221

-0.222

-0.312

01/12/2018

2506.85

28.13

-0.024

0.079

0.200

-0.224

-0.122

01/01/2019

2704.10

27.46

0.077

0.030

0.187

-0.110

-0.157

01/02/2019

2784.49

29.57

0.048

0.018

0.176

-0.128

-0.158

01/03/2019

2834.40

30.98

-0.015

0.039

0.162

-0.177

-0.123

01/04/2019

2945.83

30.52

0.059

-0.066

0.154

-0.094

-0.219

01/05/2019

2752.06

32.33

0.072

0.069

0.136

-0.065

-0.068

01/06/2019

2941.76

34.65

0.060

0.013

0.114

-0.054

-0.101

01/07/2019

2980.38

36.74

-0.013

-0.018

0.109

-0.121

-0.127

01/08/2019

2926.46

36.27

0.017

0.017

0.079

-0.062

-0.062

01/09/2019

2976.74

36.87

0.065

0.020

0.085

-0.020

-0.065

01/10/2019

3037.56

39.28

-0.091

0.034

0.085

-0.176

-0.051

01/11/2019

3140.98

35.72

0.157

0.029

0.095

0.062

-0.067

01/12/2019

3230.78

41.33

0.126

0.035

0.099

0.027

-0.065

(Yahoo Finance, 2020)

Corporate Financial Management - Answer to Part C

Period 1

Particular

( Rj-Rf)

(Rm-Rf)

Mean

-0.252

-0.251

Standard Deviation

0.04

0.05

Variance

0.00

0.00

correlation coefficient

0.75

Beta

0.133

(Yahoo Finance, 2020)

Period 2

Particular

( Rj-Rf)

(Rm-Rf)

Mean

-0.140

-0.160

Standard Deviation

0.09

0.08

Variance

0.01

0.01

correlation coefficient

0.65

Beta

-0.002

(Yahoo Finance, 2020)

Result Analysis

The period-1 mean of the data reveals that the Rf-RM is having the -.252 and .251 which is interlink to each other. The standard deviation of the period is also .04 which reflects the company has less variation in its share price which is based on the marketing factors. The correlation co-efficient is showing .745 points which is showing the positive indicator as company is having good outcomes. The correlation of coefficient of second period is also showing the .65 points which is showing the less variation in the share price as compared to the industry market rate (Yahoo Finance, 2020).

Corporate Financial Management - Answer to Part D

Period 1

Regression Statistics

Multiple R

0.005340645

R Square

2.85225E-05

Adjusted R Square

-0.045424726

Standard Error

0.211736756

Observations

24

(Yahoo Finance, 2020)

 

Df

SS

MS

F

Significance F

Regression

1

2.81329E-05

2.81329E-05

0.000627513

0.980240756

Residual

22

0.986313984

0.044832454

   

Total

23

0.986342117

     

 

 

Coefficients

Standard Error

Intercept

-0.03955233

0.043607034

X Variable 1 Beta

0.133332904

5.322628236

(Yahoo Finance, 2020)

Period 2

Regression Statistics

 

Multiple R

0.003317

R Square

1.1E-05

Adjusted R Square

-0.04761

Standard Error

0.042067

Observations

23

(Yahoo Finance, 2020)

 

Df

SS

MS

F

Significance F

Regression

1

4.09E-07

4.09E-07

0.000231

0.988015

Residual

21

0.037162

0.00177

   

Total

22

0.037162

     

 

 

Coefficients

Standard Error

Intercept

0.010004

0.009975

X Variable 1 Beta

-0.0024

0.157979

Corporate Financial Management - Answer to Part E

Explanation to Beta Value

Beta is the measure of the market volatility that has been influenced through the various factor such as Micro and macroeconomic factors. If the stock price move to more than 1 then stock beta is more than 1.From the above beta value of period one 0.133 it can be observed that if the market change by 1 then stock price will affect by 0.13 time positively. From the period two beta value is -0.0024 and can be observe that if the beta value is negative then stock price will move to reduction by 0.0024 (Yahoo Finance, 2020).

Corporate Financial Management - Answer to Part F

Company Profile

Woolworth group limited operate in the retails store across the world. This company is having 180 supermarket of retails store and also engage in whole sale business. This company is also having the hotel segment which offer the hospitality service including food, drinks and casino in Australia. Woolworth group limited is having the revenue of $ 59984000 with net profit of $ 2693000. It was founded in 1924 based in Bella Vista, Australia (Yahoo Finance, 2020).

Corporate Financial Management - Answer to Part G

Reason for Different Beta of Two Period

The main reason of difference of the beta of the two companies is related to the changing share price of the company marketing return index related to the particular period. The factors affecting share price of company in the particular period is changed differently in both the time period. However, the environmental factors, profitably and market sluggish changes may impact the business which eventually impact the share price. The changes in share price will also negatively impact the beta of the company in the two particular period (Yahoo Finance, 2020).

References for Corporate Financial Management

Yahoo Finance, (2020), Yahoo finance, share price data and market analysis, retrieved form https://finance.yahoo.com/quote/WOW.AX/profile?p=WOW.AX

Woolworths, (2020), yahoo finance, share data finance, retrieved from https://www.woolworthsgroup.com.au/page/investors/our-performance/reports/Reports/Annual_Reports

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