Stock Analysis on Net

Dollar Tree Inc. (NASDAQ:DLTR)

This company has been moved to the archive! The financial data has not been updated since November 22, 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 Dollar Tree Inc. common stock.


Rates of Return

Dollar Tree Inc., monthly rates of return

Microsoft Excel
Dollar Tree Inc. (DLTR) Standard & Poor’s 500 (S&P 500)
t Date PriceDLTR,t1 DividendDLTR,t1 RDLTR,t2 PriceS&P 500,t RS&P 500,t3
Feb 29, 2016 $80.25 1,932.23
1. Mar 31, 2016 $82.46 2.75% 2,059.74 6.60%
2. Apr 30, 2016 $79.71 -3.33% 2,065.30 0.27%
3. May 31, 2016 $90.54 13.59% 2,096.95 1.53%
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2021 $140.52 5.00% 4,766.18 4.36%
71. Jan 31, 2022 $131.22 -6.62% 4,515.55 -5.26%
Average (R): 1.08% 1.29%
Standard deviation: 8.96% 4.25%
Dollar Tree Inc. (DLTR) Standard & Poor’s 500 (S&P 500)
t Date PriceDLTR,t1 DividendDLTR,t1 RDLTR,t2 PriceS&P 500,t RS&P 500,t3
Feb 29, 2016 $80.25 1,932.23
1. Mar 31, 2016 $82.46 2.75% 2,059.74 6.60%
2. Apr 30, 2016 $79.71 -3.33% 2,065.30 0.27%
3. May 31, 2016 $90.54 13.59% 2,096.95 1.53%
4. Jun 30, 2016 $94.24 4.09% 2,098.86 0.09%
5. Jul 31, 2016 $96.29 2.18% 2,173.60 3.56%
6. Aug 31, 2016 $82.70 -14.11% 2,170.95 -0.12%
7. Sep 30, 2016 $78.93 -4.56% 2,168.27 -0.12%
8. Oct 31, 2016 $75.55 -4.28% 2,126.15 -1.94%
9. Nov 30, 2016 $88.16 16.69% 2,198.81 3.42%
10. Dec 31, 2016 $77.18 -12.45% 2,238.83 1.82%
11. Jan 31, 2017 $77.19 0.01% 2,278.87 1.79%
12. Feb 28, 2017 $76.68 -0.66% 2,363.64 3.72%
13. Mar 31, 2017 $78.46 2.32% 2,362.72 -0.04%
14. Apr 30, 2017 $82.77 5.49% 2,384.20 0.91%
15. May 31, 2017 $77.70 -6.13% 2,411.80 1.16%
16. Jun 30, 2017 $69.92 -10.01% 2,423.41 0.48%
17. Jul 31, 2017 $72.08 3.09% 2,470.30 1.93%
18. Aug 31, 2017 $79.64 10.49% 2,471.65 0.05%
19. Sep 30, 2017 $86.82 9.02% 2,519.36 1.93%
20. Oct 31, 2017 $91.25 5.10% 2,575.26 2.22%
21. Nov 30, 2017 $102.76 12.61% 2,647.58 2.81%
22. Dec 31, 2017 $107.31 4.43% 2,673.61 0.98%
23. Jan 31, 2018 $115.00 7.17% 2,823.81 5.62%
24. Feb 28, 2018 $102.64 -10.75% 2,713.83 -3.89%
25. Mar 31, 2018 $94.90 -7.54% 2,640.87 -2.69%
26. Apr 30, 2018 $95.89 1.04% 2,648.05 0.27%
27. May 31, 2018 $82.59 -13.87% 2,705.27 2.16%
28. Jun 30, 2018 $85.00 2.92% 2,718.37 0.48%
29. Jul 31, 2018 $91.28 7.39% 2,816.29 3.60%
30. Aug 31, 2018 $80.51 -11.80% 2,901.52 3.03%
31. Sep 30, 2018 $81.55 1.29% 2,913.98 0.43%
32. Oct 31, 2018 $84.30 3.37% 2,711.74 -6.94%
33. Nov 30, 2018 $86.77 2.93% 2,760.17 1.79%
34. Dec 31, 2018 $90.32 4.09% 2,506.85 -9.18%
35. Jan 31, 2019 $96.83 7.21% 2,704.10 7.87%
36. Feb 28, 2019 $96.33 -0.52% 2,784.49 2.97%
37. Mar 31, 2019 $105.04 9.04% 2,834.40 1.79%
38. Apr 30, 2019 $111.28 5.94% 2,945.83 3.93%
39. May 31, 2019 $101.59 -8.71% 2,752.06 -6.58%
40. Jun 30, 2019 $107.39 5.71% 2,941.76 6.89%
41. Jul 31, 2019 $101.75 -5.25% 2,980.38 1.31%
42. Aug 31, 2019 $101.53 -0.22% 2,926.46 -1.81%
43. Sep 30, 2019 $114.16 12.44% 2,976.74 1.72%
44. Oct 31, 2019 $110.40 -3.29% 3,037.56 2.04%
45. Nov 30, 2019 $91.46 -17.16% 3,140.98 3.40%
46. Dec 31, 2019 $94.05 2.83% 3,230.78 2.86%
47. Jan 31, 2020 $87.07 -7.42% 3,225.52 -0.16%
48. Feb 29, 2020 $83.03 -4.64% 2,954.22 -8.41%
49. Mar 31, 2020 $73.47 -11.51% 2,584.59 -12.51%
50. Apr 30, 2020 $79.67 8.44% 2,912.43 12.68%
51. May 31, 2020 $97.87 22.84% 3,044.31 4.53%
52. Jun 30, 2020 $92.68 -5.30% 3,100.29 1.84%
53. Jul 31, 2020 $93.35 0.72% 3,271.12 5.51%
54. Aug 31, 2020 $96.27 3.13% 3,500.31 7.01%
55. Sep 30, 2020 $91.34 -5.12% 3,363.00 -3.92%
56. Oct 31, 2020 $90.32 -1.12% 3,269.96 -2.77%
57. Nov 30, 2020 $109.24 20.95% 3,621.63 10.75%
58. Dec 31, 2020 $108.04 -1.10% 3,756.07 3.71%
59. Jan 31, 2021 $101.66 -5.91% 3,714.24 -1.11%
60. Feb 28, 2021 $98.20 -3.40% 3,811.15 2.61%
61. Mar 31, 2021 $114.46 16.56% 3,972.89 4.24%
62. Apr 30, 2021 $114.90 0.38% 4,181.17 5.24%
63. May 31, 2021 $97.50 -15.14% 4,204.11 0.55%
64. Jun 30, 2021 $99.50 2.05% 4,297.50 2.22%
65. Jul 31, 2021 $99.79 0.29% 4,395.26 2.27%
66. Aug 31, 2021 $90.54 -9.27% 4,522.68 2.90%
67. Sep 30, 2021 $95.72 5.72% 4,307.54 -4.76%
68. Oct 31, 2021 $107.76 12.58% 4,605.38 6.91%
69. Nov 30, 2021 $133.83 24.19% 4,567.00 -0.83%
70. Dec 31, 2021 $140.52 5.00% 4,766.18 4.36%
71. Jan 31, 2022 $131.22 -6.62% 4,515.55 -5.26%
Average (R): 1.08% 1.29%
Standard deviation: 8.96% 4.25%

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 DLTR during period t

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


Variance and Covariance

Dollar Tree Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RDLTR,t RS&P 500,t (RDLTR,tRDLTR)2 (RS&P 500,tRS&P 500)2 (RDLTR,tRDLTR)×(RS&P 500,tRS&P 500)
1. Mar 31, 2016 2.75% 6.60% 2.79 28.16 8.87
2. Apr 30, 2016 -3.33% 0.27% 19.52 1.05 4.52
3. May 31, 2016 13.59% 1.53% 156.34 0.06 3.00
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2021 5.00% 4.36% 15.33 9.42 12.02
71. Jan 31, 2022 -6.62% -5.26% 59.31 42.91 50.45
Total (Σ): 5,617.47 1,262.70 1,008.02
t Date RDLTR,t RS&P 500,t (RDLTR,tRDLTR)2 (RS&P 500,tRS&P 500)2 (RDLTR,tRDLTR)×(RS&P 500,tRS&P 500)
1. Mar 31, 2016 2.75% 6.60% 2.79 28.16 8.87
2. Apr 30, 2016 -3.33% 0.27% 19.52 1.05 4.52
3. May 31, 2016 13.59% 1.53% 156.34 0.06 3.00
4. Jun 30, 2016 4.09% 0.09% 9.02 1.44 -3.61
5. Jul 31, 2016 2.18% 3.56% 1.19 5.15 2.48
6. Aug 31, 2016 -14.11% -0.12% 230.94 2.00 21.49
7. Sep 30, 2016 -4.56% -0.12% 31.83 2.00 7.99
8. Oct 31, 2016 -4.28% -1.94% 28.79 10.46 17.36
9. Nov 30, 2016 16.69% 3.42% 243.61 4.52 33.17
10. Dec 31, 2016 -12.45% 1.82% 183.27 0.28 -7.15
11. Jan 31, 2017 0.01% 1.79% 1.14 0.25 -0.53
12. Feb 28, 2017 -0.66% 3.72% 3.04 5.89 -4.23
13. Mar 31, 2017 2.32% -0.04% 1.53 1.77 -1.65
14. Apr 30, 2017 5.49% 0.91% 19.45 0.15 -1.69
15. May 31, 2017 -6.13% 1.16% 51.96 0.02 0.97
16. Jun 30, 2017 -10.01% 0.48% 123.12 0.66 9.00
17. Jul 31, 2017 3.09% 1.93% 4.03 0.41 1.29
18. Aug 31, 2017 10.49% 0.05% 88.46 1.53 -11.64
19. Sep 30, 2017 9.02% 1.93% 62.93 0.41 5.06
20. Oct 31, 2017 5.10% 2.22% 16.16 0.86 3.72
21. Nov 30, 2017 12.61% 2.81% 132.96 2.30 17.48
22. Dec 31, 2017 4.43% 0.98% 11.19 0.10 -1.03
23. Jan 31, 2018 7.17% 5.62% 37.01 18.71 26.31
24. Feb 28, 2018 -10.75% -3.89% 139.97 26.90 61.37
25. Mar 31, 2018 -7.54% -2.69% 74.37 15.85 34.33
26. Apr 30, 2018 1.04% 0.27% 0.00 1.04 0.04
27. May 31, 2018 -13.87% 2.16% 223.59 0.75 -12.99
28. Jun 30, 2018 2.92% 0.48% 3.37 0.65 -1.48
29. Jul 31, 2018 7.39% 3.60% 39.76 5.34 14.56
30. Aug 31, 2018 -11.80% 3.03% 165.94 3.01 -22.34
31. Sep 30, 2018 1.29% 0.43% 0.04 0.74 -0.18
32. Oct 31, 2018 3.37% -6.94% 5.24 67.78 -18.85
33. Nov 30, 2018 2.93% 1.79% 3.41 0.24 0.91
34. Dec 31, 2018 4.09% -9.18% 9.05 109.62 -31.50
35. Jan 31, 2019 7.21% 7.87% 37.51 43.25 40.28
36. Feb 28, 2019 -0.52% 2.97% 2.56 2.82 -2.69
37. Mar 31, 2019 9.04% 1.79% 63.34 0.25 3.98
38. Apr 30, 2019 5.94% 3.93% 23.60 6.96 12.82
39. May 31, 2019 -8.71% -6.58% 95.86 61.94 77.05
40. Jun 30, 2019 5.71% 6.89% 21.40 31.37 25.91
41. Jul 31, 2019 -5.25% 1.31% 40.13 0.00 -0.13
42. Aug 31, 2019 -0.22% -1.81% 1.69 9.62 4.03
43. Sep 30, 2019 12.44% 1.72% 128.97 0.18 4.84
44. Oct 31, 2019 -3.29% 2.04% 19.15 0.56 -3.29
45. Nov 30, 2019 -17.16% 3.40% 332.65 4.46 -38.53
46. Dec 31, 2019 2.83% 2.86% 3.06 2.45 2.74
47. Jan 31, 2020 -7.42% -0.16% 72.33 2.12 12.37
48. Feb 29, 2020 -4.64% -8.41% 32.75 94.15 55.53
49. Mar 31, 2020 -11.51% -12.51% 158.68 190.56 173.89
50. Apr 30, 2020 8.44% 12.68% 54.11 129.78 83.80
51. May 31, 2020 22.84% 4.53% 473.55 10.47 70.42
52. Jun 30, 2020 -5.30% 1.84% 40.78 0.30 -3.49
53. Jul 31, 2020 0.72% 5.51% 0.13 17.79 -1.52
54. Aug 31, 2020 3.13% 7.01% 4.18 32.65 11.69
55. Sep 30, 2020 -5.12% -3.92% 38.49 27.20 32.35
56. Oct 31, 2020 -1.12% -2.77% 4.84 16.47 8.93
57. Nov 30, 2020 20.95% 10.75% 394.61 89.54 187.97
58. Dec 31, 2020 -1.10% 3.71% 4.76 5.86 -5.28
59. Jan 31, 2021 -5.91% -1.11% 48.83 5.79 16.81
60. Feb 28, 2021 -3.40% 2.61% 20.13 1.73 -5.91
61. Mar 31, 2021 16.56% 4.24% 239.48 8.71 45.68
62. Apr 30, 2021 0.38% 5.24% 0.49 15.60 -2.76
63. May 31, 2021 -15.14% 0.55% 263.30 0.55 12.07
64. Jun 30, 2021 2.05% 2.22% 0.94 0.86 0.90
65. Jul 31, 2021 0.29% 2.27% 0.63 0.97 -0.78
66. Aug 31, 2021 -9.27% 2.90% 107.17 2.58 -16.63
67. Sep 30, 2021 5.72% -4.76% 21.51 36.59 -28.06
68. Oct 31, 2021 12.58% 6.91% 132.14 31.61 64.63
69. Nov 30, 2021 24.19% -0.83% 534.06 4.52 -49.12
70. Dec 31, 2021 5.00% 4.36% 15.33 9.42 12.02
71. Jan 31, 2022 -6.62% -5.26% 59.31 42.91 50.45
Total (Σ): 5,617.47 1,262.70 1,008.02

Show all

VarianceDLTR = Σ(RDLTR,tRDLTR)2 ÷ (71 – 1)
= 5,617.47 ÷ (71 – 1)
= 80.25

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (71 – 1)
= 1,262.70 ÷ (71 – 1)
= 18.04

CovarianceDLTR, S&P 500 = Σ(RDLTR,tRDLTR)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= 1,008.02 ÷ (71 – 1)
= 14.40


Systematic Risk (β) Estimation

Microsoft Excel
VarianceDLTR 80.25
VarianceS&P 500 18.04
CovarianceDLTR, S&P 500 14.40
Correlation coefficientDLTR, S&P 5001 0.38
βDLTR2 0.80
αDLTR3 0.05%

Calculations

1 Correlation coefficientDLTR, S&P 500
= CovarianceDLTR, S&P 500 ÷ (Standard deviationDLTR × Standard deviationS&P 500)
= 14.40 ÷ (8.96% × 4.25%)
= 0.38

2 βDLTR
= CovarianceDLTR, S&P 500 ÷ VarianceS&P 500
= 14.40 ÷ 18.04
= 0.80

3 αDLTR
= AverageDLTR – βDLTR × AverageS&P 500
= 1.08%0.80 × 1.29%
= 0.05%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.68%
Expected rate of return on market portfolio2 E(RM) 13.78%
Systematic risk (β) of Dollar Tree Inc. common stock βDLTR 0.80
 
Expected rate of return on Dollar Tree Inc. common stock3 E(RDLTR) 11.95%

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(RDLTR) = RF + βDLTR [E(RM) – RF]
= 4.68% + 0.80 [13.78%4.68%]
= 11.95%