Ixing two previous orders (only part 4 of the orders)
I will attach the instructions but I will explain what I want. I need your help. I placed 4 similar orders (777396, 777399, 777401, 777404) Two orders (777399, 777404) lack one part that has been done in the other orders. I want you to fix the other two orders in 8 hours. The work is less that two pages. Please fix part 4 which is below:
To calculate the stock price, you need first to determine the required rate of return. This you could get by the equation of the Capital Asset Pricing Model. Required return return on risk free security (from the Central Bank)+Beta(return on the market portfolio estimated by the return on stock price index risk free rate return). to calculate Beta you need return on the stock you analyze and the return on the stock price index. Then beta is just the covariance between the return on the security and the return on the index divided by the variance of the return on the market index.
when you calculated the required return, plug it in the price equation and calculate the price. Compare the price you got with that in the market and see if it is overpriced or underpriced.