4. Expected Return on Stock = Risk- Free Return + (Beta *Market Risk Premium)
ERi =Rf + Bi(ERm –Rf)
ERi = Expected Return on Stock
Rf = Risk- Free Return
Bi = Beta
(ERm –Rf)= Market Risk Premium
Market Risk Premium = Expected Market Return – Risk Free Rate of return
Substituting the value from excel provided
ERi = 1 + 0.377224(8-1) = 3.640568
ERi = 1+ 1.08607(8-1) = 8.60249
Quantas has high expected return, while Dominos had low.
5. In the Excel
1.As per the announcement on March 16th’20 Dominos had announced to take their work with sure well care manner where they will remain open and serving the nationwide with an ageda of 100% zero human contact to deliveries. The market of dominos remained on the floating ground with various ups and down, though the company decided to close their chains in France for the period of 15 days, still the company mained to open its chains in another part of the world, the statement made by dominos still kept the stockholders engaged with making a very precised comment “It is not certain if the temperorary closure of the Company’s store in France will have a material effect of the Finanicial Result of FY20”.
The announcement made on 25th March’20 had a very unpredictable stat where if one part of world made the Company stand still (New Zealand), while many parts of world experience a heavy demand and also recruit of drivers. So, overall the Company’s balance sheet remains strong and the company has Significant headroom in its committed facilities and covenants
The overall graphical representation has marked the Company to hold to its place, may be even down sometimes still it has made its up in the graph. Therefore, the suffering in the Company is going to be short term.
Due to the hit of Covid-19, the tourism business immensely effected the losses and suffering could be easily understood by the several announcements made by the Company.
3. The various announcement made by Qantas left market with various questionable points, stakeholder to employees, everyone went blank with various cutoffs. The stock market came crashing down with pricing up to 3,540. This lead to sudden fall in the volume of investors.
The Graph and market announcements have make it clear that the Covid-19 has severely damaged the market of tour and tourism, and will continue to the time unpredictable and this had led to fall of stock in the market over a recent time phrase.
For more guidance: https://www.asx.com.au/asx/statistics/announcements.do (Accessed 1 December 2019)
Australian Energy Regulator, 2009, Electricity transmission and distribution network service providers: Review of the weighted average cost of capital (WACC) parameters, May 2009.
Vasicek, O., 1973, “A note on using cross-sectional information in Bayesian estimation of security betas,” Journal of Finance, 28, 1233–1245.
Frontier Economics, 2015, Review of the AER's conceptual analysis for equity beta, May
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