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Calculating Betas (Cálculo De Betas. In Spanish)

Author

Listed:
  • Ignacio Vélez Pareja

Abstract

This teaching note shows the relationship between levered and unlevered betas and the general formulation for the cost of equity. It also shows, step by step, the procedure to estimate betas from data found in the stock market.It shows well known procedures for estimating betas: correlation coefficient and standard deviations of the stock and the market, covariance between stock and market and market variance and ordinary least squares (numerical and graphical).This written material is useful for practitioners, teachers and students of Corporate Finance.

Suggested Citation

  • Ignacio Vélez Pareja, 2001. "Calculating Betas (Cálculo De Betas. In Spanish)," Proyecciones Financieras y Valoración 8084, Master Consultores.
    • Handle: RePEc:col:000463:008084
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    File URL: http://ssrn.com/abstract=1773771
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    More about this item

    Keywords

    Betas; beta calculation; stock returns; market returns; systematic risk.;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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