Stock Analysis on Net

Bed Bath & Beyond Inc. (NASDAQ:BBBY)

This company has been moved to the archive! The financial data has not been updated since September 30, 2022.

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Bed Bath & Beyond Inc. common stock.


Rates of Return

Bed Bath & Beyond Inc., monthly rates of return

Microsoft Excel
Bed Bath & Beyond Inc. (BBBY) Standard & Poor’s 500 (S&P 500)
t Date PriceBBBY,t1 DividendBBBY,t1 RBBBY,t2 PriceS&P 500,t RS&P 500,t3
Mar 31, 2016 $49.64 2,059.74
1. Apr 30, 2016 $47.22 -4.88% 2,065.30 0.27%
2. May 31, 2016 $44.75 -5.23% 2,096.95 1.53%
3. Jun 30, 2016 $43.22 $0.125 -3.14% 2,098.86 0.09%
. . . . . . .
. . . . . . .
. . . . . . .
70. Jan 31, 2022 $16.24 11.39% 4,515.55 -5.26%
71. Feb 28, 2022 $16.89 4.00% 4,373.94 -3.14%
Average (R): 0.79% 1.16%
Standard deviation: 21.17% 4.23%
Bed Bath & Beyond Inc. (BBBY) Standard & Poor’s 500 (S&P 500)
t Date PriceBBBY,t1 DividendBBBY,t1 RBBBY,t2 PriceS&P 500,t RS&P 500,t3
Mar 31, 2016 $49.64 2,059.74
1. Apr 30, 2016 $47.22 -4.88% 2,065.30 0.27%
2. May 31, 2016 $44.75 -5.23% 2,096.95 1.53%
3. Jun 30, 2016 $43.22 $0.125 -3.14% 2,098.86 0.09%
4. Jul 31, 2016 $44.95 4.00% 2,173.60 3.56%
5. Aug 31, 2016 $46.37 3.16% 2,170.95 -0.12%
6. Sep 30, 2016 $43.11 $0.125 -6.76% 2,168.27 -0.12%
7. Oct 31, 2016 $40.42 -6.24% 2,126.15 -1.94%
8. Nov 30, 2016 $44.81 10.86% 2,198.81 3.42%
9. Dec 31, 2016 $40.64 $0.125 -9.03% 2,238.83 1.82%
10. Jan 31, 2017 $40.35 -0.71% 2,278.87 1.79%
11. Feb 28, 2017 $40.40 0.12% 2,363.64 3.72%
12. Mar 31, 2017 $39.46 $0.125 -2.02% 2,362.72 -0.04%
13. Apr 30, 2017 $38.75 -1.80% 2,384.20 0.91%
14. May 31, 2017 $34.41 -11.20% 2,411.80 1.16%
15. Jun 30, 2017 $30.40 $0.15 -11.22% 2,423.41 0.48%
16. Jul 31, 2017 $29.90 -1.64% 2,470.30 1.93%
17. Aug 31, 2017 $27.59 -7.73% 2,471.65 0.05%
18. Sep 30, 2017 $23.47 $0.15 -14.39% 2,519.36 1.93%
19. Oct 31, 2017 $19.90 -15.21% 2,575.26 2.22%
20. Nov 30, 2017 $22.39 12.51% 2,647.58 2.81%
21. Dec 31, 2017 $21.99 $0.15 -1.12% 2,673.61 0.98%
22. Jan 31, 2018 $23.08 4.96% 2,823.81 5.62%
23. Feb 28, 2018 $21.44 -7.11% 2,713.83 -3.89%
24. Mar 31, 2018 $20.99 $0.15 -1.40% 2,640.87 -2.69%
25. Apr 30, 2018 $17.46 -16.82% 2,648.05 0.27%
26. May 31, 2018 $18.16 4.01% 2,705.27 2.16%
27. Jun 30, 2018 $19.93 $0.16 10.63% 2,718.37 0.48%
28. Jul 31, 2018 $18.73 -6.02% 2,816.29 3.60%
29. Aug 31, 2018 $17.94 -4.22% 2,901.52 3.03%
30. Sep 30, 2018 $15.00 $0.16 -15.50% 2,913.98 0.43%
31. Oct 31, 2018 $13.74 -8.40% 2,711.74 -6.94%
32. Nov 30, 2018 $12.88 -6.26% 2,760.17 1.79%
33. Dec 31, 2018 $11.32 $0.16 -10.87% 2,506.85 -9.18%
34. Jan 31, 2019 $15.09 33.30% 2,704.10 7.87%
35. Feb 28, 2019 $16.73 10.87% 2,784.49 2.97%
36. Mar 31, 2019 $16.99 $0.16 2.51% 2,834.40 1.79%
37. Apr 30, 2019 $16.71 -1.65% 2,945.83 3.93%
38. May 31, 2019 $12.69 -24.06% 2,752.06 -6.58%
39. Jun 30, 2019 $11.62 $0.17 -7.09% 2,941.76 6.89%
40. Jul 31, 2019 $9.71 -16.44% 2,980.38 1.31%
41. Aug 31, 2019 $9.67 -0.41% 2,926.46 -1.81%
42. Sep 30, 2019 $10.64 $0.17 11.79% 2,976.74 1.72%
43. Oct 31, 2019 $13.70 28.76% 3,037.56 2.04%
44. Nov 30, 2019 $14.58 6.42% 3,140.98 3.40%
45. Dec 31, 2019 $17.30 $0.17 19.82% 3,230.78 2.86%
46. Jan 31, 2020 $14.25 -17.63% 3,225.52 -0.16%
47. Feb 29, 2020 $10.81 -24.14% 2,954.22 -8.41%
48. Mar 31, 2020 $4.21 $0.17 -59.48% 2,584.59 -12.51%
49. Apr 30, 2020 $6.19 47.03% 2,912.43 12.68%
50. May 31, 2020 $7.27 17.45% 3,044.31 4.53%
51. Jun 30, 2020 $10.60 45.80% 3,100.29 1.84%
52. Jul 31, 2020 $10.82 2.08% 3,271.12 5.51%
53. Aug 31, 2020 $12.18 12.57% 3,500.31 7.01%
54. Sep 30, 2020 $14.98 22.99% 3,363.00 -3.92%
55. Oct 31, 2020 $19.80 32.18% 3,269.96 -2.77%
56. Nov 30, 2020 $20.96 5.86% 3,621.63 10.75%
57. Dec 31, 2020 $17.76 -15.27% 3,756.07 3.71%
58. Jan 31, 2021 $35.33 98.93% 3,714.24 -1.11%
59. Feb 28, 2021 $26.86 -23.97% 3,811.15 2.61%
60. Mar 31, 2021 $29.15 8.53% 3,972.89 4.24%
61. Apr 30, 2021 $25.32 -13.14% 4,181.17 5.24%
62. May 31, 2021 $27.99 10.55% 4,204.11 0.55%
63. Jun 30, 2021 $33.29 18.94% 4,297.50 2.22%
64. Jul 31, 2021 $28.54 -14.27% 4,395.26 2.27%
65. Aug 31, 2021 $27.54 -3.50% 4,522.68 2.90%
66. Sep 30, 2021 $17.27 -37.29% 4,307.54 -4.76%
67. Oct 31, 2021 $14.04 -18.70% 4,605.38 6.91%
68. Nov 30, 2021 $18.33 30.56% 4,567.00 -0.83%
69. Dec 31, 2021 $14.58 -20.46% 4,766.18 4.36%
70. Jan 31, 2022 $16.24 11.39% 4,515.55 -5.26%
71. Feb 28, 2022 $16.89 4.00% 4,373.94 -3.14%
Average (R): 0.79% 1.16%
Standard deviation: 21.17% 4.23%

Show all

1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of BBBY during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

Bed Bath & Beyond Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RBBBY,t RS&P 500,t (RBBBY,tRBBBY)2 (RS&P 500,tRS&P 500)2 (RBBBY,tRBBBY)×(RS&P 500,tRS&P 500)
1. Apr 30, 2016 -4.88% 0.27% 32.10 0.78 5.02
2. May 31, 2016 -5.23% 1.53% 36.26 0.14 -2.27
3. Jun 30, 2016 -3.14% 0.09% 15.45 1.13 4.18
. . . . . . .
. . . . . . .
. . . . . . .
70. Jan 31, 2022 11.39% -5.26% 112.24 41.13 -67.95
71. Feb 28, 2022 4.00% -3.14% 10.31 18.41 -13.78
Total (Σ): 31,361.94 1,252.81 1,931.29
t Date RBBBY,t RS&P 500,t (RBBBY,tRBBBY)2 (RS&P 500,tRS&P 500)2 (RBBBY,tRBBBY)×(RS&P 500,tRS&P 500)
1. Apr 30, 2016 -4.88% 0.27% 32.10 0.78 5.02
2. May 31, 2016 -5.23% 1.53% 36.26 0.14 -2.27
3. Jun 30, 2016 -3.14% 0.09% 15.45 1.13 4.18
4. Jul 31, 2016 4.00% 3.56% 10.32 5.79 7.73
5. Aug 31, 2016 3.16% -0.12% 5.61 1.63 -3.02
6. Sep 30, 2016 -6.76% -0.12% 57.03 1.63 9.66
7. Oct 31, 2016 -6.24% -1.94% 49.43 9.60 21.78
8. Nov 30, 2016 10.86% 3.42% 101.40 5.12 22.78
9. Dec 31, 2016 -9.03% 1.82% 96.39 0.44 -6.53
10. Jan 31, 2017 -0.71% 1.79% 2.26 0.40 -0.95
11. Feb 28, 2017 0.12% 3.72% 0.45 6.58 -1.71
12. Mar 31, 2017 -2.02% -0.04% 7.89 1.43 3.35
13. Apr 30, 2017 -1.80% 0.91% 6.71 0.06 0.64
14. May 31, 2017 -11.20% 1.16% 143.78 0.00 -0.03
15. Jun 30, 2017 -11.22% 0.48% 144.21 0.45 8.09
16. Jul 31, 2017 -1.64% 1.93% 5.93 0.61 -1.90
17. Aug 31, 2017 -7.73% 0.05% 72.54 1.21 9.37
18. Sep 30, 2017 -14.39% 1.93% 230.44 0.60 -11.77
19. Oct 31, 2017 -15.21% 2.22% 256.06 1.13 -17.02
20. Nov 30, 2017 12.51% 2.81% 137.39 2.73 19.38
21. Dec 31, 2017 -1.12% 0.98% 3.64 0.03 0.33
22. Jan 31, 2018 4.96% 5.62% 17.35 19.92 18.59
23. Feb 28, 2018 -7.11% -3.89% 62.36 25.50 39.88
24. Mar 31, 2018 -1.40% -2.69% 4.80 14.77 8.42
25. Apr 30, 2018 -16.82% 0.27% 310.06 0.78 15.55
26. May 31, 2018 4.01% 2.16% 10.36 1.01 3.24
27. Jun 30, 2018 10.63% 0.48% 96.76 0.45 -6.60
28. Jul 31, 2018 -6.02% 3.60% 46.40 5.99 -16.67
29. Aug 31, 2018 -4.22% 3.03% 25.09 3.50 -9.37
30. Sep 30, 2018 -15.50% 0.43% 265.27 0.53 11.82
31. Oct 31, 2018 -8.40% -6.94% 84.47 65.54 74.41
32. Nov 30, 2018 -6.26% 1.79% 49.70 0.40 -4.45
33. Dec 31, 2018 -10.87% -9.18% 135.97 106.77 120.49
34. Jan 31, 2019 33.30% 7.87% 1,057.09 45.07 218.27
35. Feb 28, 2019 10.87% 2.97% 101.55 3.30 18.32
36. Mar 31, 2019 2.51% 1.79% 2.96 0.41 1.10
37. Apr 30, 2019 -1.65% 3.93% 5.95 7.71 -6.77
38. May 31, 2019 -24.06% -6.58% 617.45 59.80 192.15
39. Jun 30, 2019 -7.09% 6.89% 62.14 32.92 -45.23
40. Jul 31, 2019 -16.44% 1.31% 296.81 0.02 -2.72
41. Aug 31, 2019 -0.41% -1.81% 1.45 8.79 3.57
42. Sep 30, 2019 11.79% 1.72% 120.96 0.32 6.19
43. Oct 31, 2019 28.76% 2.04% 782.23 0.79 24.84
44. Nov 30, 2019 6.42% 3.40% 31.72 5.06 12.67
45. Dec 31, 2019 19.82% 2.86% 362.17 2.90 32.43
46. Jan 31, 2020 -17.63% -0.16% 339.34 1.74 24.28
47. Feb 29, 2020 -24.14% -8.41% 621.57 91.51 238.50
48. Mar 31, 2020 -59.48% -12.51% 3,632.83 186.79 823.75
49. Apr 30, 2020 47.03% 12.68% 2,138.13 132.92 533.11
50. May 31, 2020 17.45% 4.53% 277.44 11.38 56.18
51. Jun 30, 2020 45.80% 1.84% 2,026.23 0.47 30.78
52. Jul 31, 2020 2.08% 5.51% 1.65 18.97 5.59
53. Aug 31, 2020 12.57% 7.01% 138.73 34.24 68.92
54. Sep 30, 2020 22.99% -3.92% 492.73 25.79 -112.72
55. Oct 31, 2020 32.18% -2.77% 985.03 15.38 -123.08
56. Nov 30, 2020 5.86% 10.75% 25.68 92.15 48.65
57. Dec 31, 2020 -15.27% 3.71% 257.87 6.54 -41.06
58. Jan 31, 2021 98.93% -1.11% 9,631.30 5.15 -222.66
59. Feb 28, 2021 -23.97% 2.61% 613.30 2.11 -36.01
60. Mar 31, 2021 8.53% 4.24% 59.83 9.54 23.89
61. Apr 30, 2021 -13.14% 5.24% 194.04 16.71 -56.94
62. May 31, 2021 10.55% 0.55% 95.14 0.37 -5.92
63. Jun 30, 2021 18.94% 2.22% 329.22 1.14 19.35
64. Jul 31, 2021 -14.27% 2.27% 226.79 1.25 -16.86
65. Aug 31, 2021 -3.50% 2.90% 18.45 3.04 -7.49
66. Sep 30, 2021 -37.29% -4.76% 1,450.26 34.95 225.14
67. Oct 31, 2021 -18.70% 6.91% 380.01 33.17 -112.27
68. Nov 30, 2021 30.56% -0.83% 885.93 3.95 -59.19
69. Dec 31, 2021 -20.46% 4.36% 451.53 10.28 -68.13
70. Jan 31, 2022 11.39% -5.26% 112.24 41.13 -67.95
71. Feb 28, 2022 4.00% -3.14% 10.31 18.41 -13.78
Total (Σ): 31,361.94 1,252.81 1,931.29

Show all

VarianceBBBY = Σ(RBBBY,tRBBBY)2 ÷ (71 – 1)
= 31,361.94 ÷ (71 – 1)
= 448.03

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (71 – 1)
= 1,252.81 ÷ (71 – 1)
= 17.90

CovarianceBBBY, S&P 500 = Σ(RBBBY,tRBBBY)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= 1,931.29 ÷ (71 – 1)
= 27.59


Systematic Risk (β) Estimation

Microsoft Excel
VarianceBBBY 448.03
VarianceS&P 500 17.90
CovarianceBBBY, S&P 500 27.59
Correlation coefficientBBBY, S&P 5001 0.31
βBBBY2 1.54
αBBBY3 -0.99%

Calculations

1 Correlation coefficientBBBY, S&P 500
= CovarianceBBBY, S&P 500 ÷ (Standard deviationBBBY × Standard deviationS&P 500)
= 27.59 ÷ (21.17% × 4.23%)
= 0.31

2 βBBBY
= CovarianceBBBY, S&P 500 ÷ VarianceS&P 500
= 27.59 ÷ 17.90
= 1.54

3 αBBBY
= AverageBBBY – βBBBY × AverageS&P 500
= 0.79%1.54 × 1.16%
= -0.99%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.56%
Expected rate of return on market portfolio2 E(RM) 13.77%
Systematic risk (β) of Bed Bath & Beyond Inc. common stock βBBBY 1.54
 
Expected rate of return on Bed Bath & Beyond Inc. common stock3 E(RBBBY) 18.76%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RBBBY) = RF + βBBBY [E(RM) – RF]
= 4.56% + 1.54 [13.77%4.56%]
= 18.76%