Reference no: EM131327570
Mr. Prashant Gupta is interested in investing in equity shares of Infosys and Hamdard. Infosys Technologies Ltd. (NASDAQ: INFY) which was started in 1981 by seven people with US$ 250. Today, it is a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion. It offers span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing.
Hamdard (Wakf) Laboratories, India is a famous pharmaceutical company in India known for its Unani and Ayurvedic products. It is the world's largest manufacturer of Unani medicinesSome of its more famous products include Safi, Sharbat Rooh Afza, Cinkara, Roghan Badam Shirin and Pachnol. It is associated with Hamdard Foundation, India.
Being conservative in nature, he wants to determine the risk associated with investments. In specific terms, he wants to seek data related to both levered and unlevered beta of these companies. He approaches Nitin Shah, a financial consultant to do the needful. Nitin has collected the relevant information detailed below:
|
Number
(MONTHS)
|
INFOSYS*
|
HAMDARD*
|
S&P CNX NIFTY**
|
|
1
|
0.1455
|
0.0432
|
0.0654
|
|
2
|
0.1291
|
0.307
|
0.1536
|
|
3
|
-0.1036
|
-0.0498
|
-0.0749
|
|
4
|
-0.0643
|
-0.0369
|
0.0473
|
|
5
|
-0.0673
|
-0.0272
|
-0.0178
|
|
6
|
0.1361
|
0.0286
|
-0.0291
|
|
7
|
-0.0111
|
-0.1088
|
-0.1465
|
|
8
|
0.0452
|
-0.1338
|
0.0194
|
|
9
|
0.0277
|
0.0913
|
0.0663
|
|
10
|
0.0581
|
0.011
|
-0.0022
|
|
11
|
0.0313
|
0.0581
|
0.0854
|
|
12
|
0.1021
|
0.1043
|
0.0127
|
|
13
|
0.1652
|
0.0876
|
0.0914
|
|
14
|
-0.0237
|
0.0617
|
0.0604
|
|
15
|
-0.0581
|
0.0877
|
-0.0099
|
|
16
|
-0.0077
|
0.14
|
0.0119
|
|
17
|
-0.0401
|
--0.0369
|
-0.008
|
|
18
|
-0.0589
|
0.0473
|
-0.0605
|
|
19
|
0.1335
|
0.1054
|
0.0746
|
|
20
|
0.0693
|
0.0249
|
0.0596
|
|
21
|
-0.0391
|
0.1082
|
0.048
|
|
22
|
-0.0086
|
0.048
|
0.0378
|
|
23
|
0.0196
|
0.068
|
0.0813
|
(i) Monthly returns on equity shares of Infosys and Hamdard for a period of 2 years (w.e.f. October 2006 to September 2008) along with portfolio of S&P CNX NIFTY.
(ii) Return on 364-days treasury bills issued by Government of India for the period 2007-08 is 5.15 per cent per annum and 0.419 per month. This rate is to be used as a proxy for risk-free rate of return.
(iii) Debt-equity ratio (based on the average of 2004 to 2008) is 1.6 per cent for Wipro and 31.4 per cent for Dabur.
(iv) Corporate tax is 35 per cent.
Question
Compute the Beta and interpret it for Prashant. Examine different circumstances with analysis of data.
|
What extent agree or disagree with interpretation provided
: Explain to what extent you agree or disagree with the interpretations provided. What does this assignment have to do with cross-cultural perspectives of tourism?
|
|
Write an analysis of one of the media pieces about company
: An important part of any change project is how the change is communicated to the organization, to the change agents, to the line workers, to the customers, and to the public. Along with media relations issues, communicating change (especially in a..
|
|
What are potency and efficacy and how are they different
: To assist Steven with making an educated decision about which medication to take, complete the following: What are potency and efficacy, and how are they different? What other factors might influence Steven's decision
|
|
What is the value of the common stock
: A stock paid $3.85 in dividends at the end of last year and is expected to pay a cash dividend until infinity. No growth is expected. Investors require a 6% rate of return. What is the value of the common stock? Which of the followin is NOT a reason ..
|
|
Compute the beta and interpret it for prashant
: Mr. Prashant Gupta is interested in investing in equity shares of Infosys and Hamdard. - Compute the Beta and interpret it for Prashant. Examine different circumstances with analysis of data.
|
|
How may structure have facilitated organizational skewing
: What are the group decision-making processes and structures in place at your current or with a previous employer that were designed to eliminate bias, create structure, and cultivate consistently better decisions?
|
|
What are the issues identified in the case study
: As you form your recommendations for a plan of action, consider the following: What are the issues identified in the case study? What are the facts the principal and teachers need to consider in planning for Jamal? Were there any issues related to cu..
|
|
What is the correct initial incremental cash flow
: You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $100,000, but if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee s..
|
|
What do you think the key priorities should be
: Based on the information you have to date, what do you think the key priorities should be?Who should be hired and why: PCNs, HCNs or a combination? Write a recruitment advertisement for the new positions. Design a compensation package for the hotel m..
|