Stock Analysis on Net

Expedia Group Inc. (NASDAQ:EXPE)

This company has been moved to the archive! The financial data has not been updated since May 3, 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 Expedia Group Inc. common stock.


Rates of Return

Expedia Group Inc., monthly rates of return

Microsoft Excel
Expedia Group Inc. (EXPE) Standard & Poor’s 500 (S&P 500)
t Date PriceEXPE,t1 DividendEXPE,t1 REXPE,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2017 $121.59 2,278.87
1. Feb 28, 2017 $119.04 -2.10% 2,363.64 3.72%
2. Mar 31, 2017 $126.17 $0.28 6.22% 2,362.72 -0.04%
3. Apr 30, 2017 $133.72 5.98% 2,384.20 0.91%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2021 $161.09 -2.02% 4,567.00 -0.83%
59. Dec 31, 2021 $180.72 12.19% 4,766.18 4.36%
Average (R): 1.45% 1.36%
Standard deviation: 11.68% 4.48%
Expedia Group Inc. (EXPE) Standard & Poor’s 500 (S&P 500)
t Date PriceEXPE,t1 DividendEXPE,t1 REXPE,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2017 $121.59 2,278.87
1. Feb 28, 2017 $119.04 -2.10% 2,363.64 3.72%
2. Mar 31, 2017 $126.17 $0.28 6.22% 2,362.72 -0.04%
3. Apr 30, 2017 $133.72 5.98% 2,384.20 0.91%
4. May 31, 2017 $143.78 $0.28 7.73% 2,411.80 1.16%
5. Jun 30, 2017 $148.95 3.60% 2,423.41 0.48%
6. Jul 31, 2017 $156.47 5.05% 2,470.30 1.93%
7. Aug 31, 2017 $148.36 $0.30 -4.99% 2,471.65 0.05%
8. Sep 30, 2017 $143.94 -2.98% 2,519.36 1.93%
9. Oct 31, 2017 $124.66 -13.39% 2,575.26 2.22%
10. Nov 30, 2017 $122.50 $0.30 -1.49% 2,647.58 2.81%
11. Dec 31, 2017 $119.77 -2.23% 2,673.61 0.98%
12. Jan 31, 2018 $128.01 6.88% 2,823.81 5.62%
13. Feb 28, 2018 $105.17 -17.84% 2,713.83 -3.89%
14. Mar 31, 2018 $110.41 $0.30 5.27% 2,640.87 -2.69%
15. Apr 30, 2018 $115.14 4.28% 2,648.05 0.27%
16. May 31, 2018 $121.03 $0.30 5.38% 2,705.27 2.16%
17. Jun 30, 2018 $120.19 -0.69% 2,718.37 0.48%
18. Jul 31, 2018 $133.84 11.36% 2,816.29 3.60%
19. Aug 31, 2018 $130.50 $0.32 -2.26% 2,901.52 3.03%
20. Sep 30, 2018 $130.48 -0.02% 2,913.98 0.43%
21. Oct 31, 2018 $125.43 -3.87% 2,711.74 -6.94%
22. Nov 30, 2018 $120.79 $0.32 -3.44% 2,760.17 1.79%
23. Dec 31, 2018 $112.65 -6.74% 2,506.85 -9.18%
24. Jan 31, 2019 $119.25 5.86% 2,704.10 7.87%
25. Feb 28, 2019 $123.31 3.40% 2,784.49 2.97%
26. Mar 31, 2019 $119.00 $0.32 -3.24% 2,834.40 1.79%
27. Apr 30, 2019 $129.84 9.11% 2,945.83 3.93%
28. May 31, 2019 $115.00 $0.32 -11.18% 2,752.06 -6.58%
29. Jun 30, 2019 $133.03 15.68% 2,941.76 6.89%
30. Jul 31, 2019 $132.74 -0.22% 2,980.38 1.31%
31. Aug 31, 2019 $130.10 $0.34 -1.73% 2,926.46 -1.81%
32. Sep 30, 2019 $134.41 3.31% 2,976.74 1.72%
33. Oct 31, 2019 $136.66 1.67% 3,037.56 2.04%
34. Nov 30, 2019 $101.66 $0.34 -25.36% 3,140.98 3.40%
35. Dec 31, 2019 $108.14 6.37% 3,230.78 2.86%
36. Jan 31, 2020 $108.45 0.29% 3,225.52 -0.16%
37. Feb 29, 2020 $98.62 -9.06% 2,954.22 -8.41%
38. Mar 31, 2020 $56.27 $0.34 -42.60% 2,584.59 -12.51%
39. Apr 30, 2020 $70.98 26.14% 2,912.43 12.68%
40. May 31, 2020 $79.48 11.98% 3,044.31 4.53%
41. Jun 30, 2020 $82.20 3.42% 3,100.29 1.84%
42. Jul 31, 2020 $81.01 -1.45% 3,271.12 5.51%
43. Aug 31, 2020 $98.15 21.16% 3,500.31 7.01%
44. Sep 30, 2020 $91.69 -6.58% 3,363.00 -3.92%
45. Oct 31, 2020 $94.15 2.68% 3,269.96 -2.77%
46. Nov 30, 2020 $124.49 32.23% 3,621.63 10.75%
47. Dec 31, 2020 $132.40 6.35% 3,756.07 3.71%
48. Jan 31, 2021 $124.10 -6.27% 3,714.24 -1.11%
49. Feb 28, 2021 $161.00 29.73% 3,811.15 2.61%
50. Mar 31, 2021 $172.12 6.91% 3,972.89 4.24%
51. Apr 30, 2021 $176.23 2.39% 4,181.17 5.24%
52. May 31, 2021 $176.95 0.41% 4,204.11 0.55%
53. Jun 30, 2021 $163.71 -7.48% 4,297.50 2.22%
54. Jul 31, 2021 $160.87 -1.73% 4,395.26 2.27%
55. Aug 31, 2021 $144.50 -10.18% 4,522.68 2.90%
56. Sep 30, 2021 $163.90 13.43% 4,307.54 -4.76%
57. Oct 31, 2021 $164.41 0.31% 4,605.38 6.91%
58. Nov 30, 2021 $161.09 -2.02% 4,567.00 -0.83%
59. Dec 31, 2021 $180.72 12.19% 4,766.18 4.36%
Average (R): 1.45% 1.36%
Standard deviation: 11.68% 4.48%

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

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

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


Variance and Covariance

Expedia Group Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date REXPE,t RS&P 500,t (REXPE,tREXPE)2 (RS&P 500,tRS&P 500)2 (REXPE,tREXPE)×(RS&P 500,tRS&P 500)
1. Feb 28, 2017 -2.10% 3.72% 12.59 5.58 -8.38
2. Mar 31, 2017 6.22% -0.04% 22.79 1.95 -6.67
3. Apr 30, 2017 5.98% 0.91% 20.55 0.20 -2.03
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2021 -2.02% -0.83% 12.04 4.80 7.60
59. Dec 31, 2021 12.19% 4.36% 115.23 9.02 32.24
Total (Σ): 7,918.62 1,164.17 1,893.98
t Date REXPE,t RS&P 500,t (REXPE,tREXPE)2 (RS&P 500,tRS&P 500)2 (REXPE,tREXPE)×(RS&P 500,tRS&P 500)
1. Feb 28, 2017 -2.10% 3.72% 12.59 5.58 -8.38
2. Mar 31, 2017 6.22% -0.04% 22.79 1.95 -6.67
3. Apr 30, 2017 5.98% 0.91% 20.55 0.20 -2.03
4. May 31, 2017 7.73% 1.16% 39.46 0.04 -1.26
5. Jun 30, 2017 3.60% 0.48% 4.60 0.77 -1.88
6. Jul 31, 2017 5.05% 1.93% 12.94 0.33 2.08
7. Aug 31, 2017 -4.99% 0.05% 41.51 1.70 8.40
8. Sep 30, 2017 -2.98% 1.93% 19.63 0.33 -2.54
9. Oct 31, 2017 -13.39% 2.22% 220.39 0.74 -12.78
10. Nov 30, 2017 -1.49% 2.81% 8.66 2.10 -4.27
11. Dec 31, 2017 -2.23% 0.98% 13.54 0.14 1.38
12. Jan 31, 2018 6.88% 5.62% 29.47 18.15 23.13
13. Feb 28, 2018 -17.84% -3.89% 372.24 27.59 101.34
14. Mar 31, 2018 5.27% -2.69% 14.57 16.37 -15.44
15. Apr 30, 2018 4.28% 0.27% 8.03 1.18 -3.08
16. May 31, 2018 5.38% 2.16% 15.40 0.64 3.15
17. Jun 30, 2018 -0.69% 0.48% 4.60 0.76 1.87
18. Jul 31, 2018 11.36% 3.60% 98.13 5.04 22.23
19. Aug 31, 2018 -2.26% 3.03% 13.75 2.78 -6.19
20. Sep 30, 2018 -0.02% 0.43% 2.15 0.86 1.36
21. Oct 31, 2018 -3.87% -6.94% 28.32 68.86 44.16
22. Nov 30, 2018 -3.44% 1.79% 23.96 0.18 -2.10
23. Dec 31, 2018 -6.74% -9.18% 67.08 111.00 86.29
24. Jan 31, 2019 5.86% 7.87% 19.43 42.39 28.70
25. Feb 28, 2019 3.40% 2.97% 3.82 2.61 3.15
26. Mar 31, 2019 -3.24% 1.79% 21.97 0.19 -2.04
27. Apr 30, 2019 9.11% 3.93% 58.65 6.62 19.71
28. May 31, 2019 -11.18% -6.58% 159.62 62.97 100.26
29. Jun 30, 2019 15.68% 6.89% 202.41 30.64 78.75
30. Jul 31, 2019 -0.22% 1.31% 2.79 0.00 0.08
31. Aug 31, 2019 -1.73% -1.81% 10.14 10.03 10.08
32. Sep 30, 2019 3.31% 1.72% 3.47 0.13 0.67
33. Oct 31, 2019 1.67% 2.04% 0.05 0.47 0.15
34. Nov 30, 2019 -25.36% 3.40% 718.96 4.19 -54.88
35. Dec 31, 2019 6.37% 2.86% 24.24 2.25 7.39
36. Jan 31, 2020 0.29% -0.16% 1.36 2.31 1.77
37. Feb 29, 2020 -9.06% -8.41% 110.57 95.43 102.72
38. Mar 31, 2020 -42.60% -12.51% 1,940.32 192.37 610.95
39. Apr 30, 2020 26.14% 12.68% 609.63 128.29 279.66
40. May 31, 2020 11.98% 4.53% 110.76 10.05 33.36
41. Jun 30, 2020 3.42% 1.84% 3.89 0.23 0.95
42. Jul 31, 2020 -1.45% 5.51% 8.40 17.24 -12.04
43. Aug 31, 2020 21.16% 7.01% 388.35 31.91 111.31
44. Sep 30, 2020 -6.58% -3.92% 64.53 27.89 42.42
45. Oct 31, 2020 2.68% -2.77% 1.52 17.01 -5.08
46. Nov 30, 2020 32.23% 10.75% 947.04 88.30 289.17
47. Dec 31, 2020 6.35% 3.71% 24.04 5.54 11.54
48. Jan 31, 2021 -6.27% -1.11% 59.60 6.11 19.08
49. Feb 28, 2021 29.73% 2.61% 799.92 1.57 35.39
50. Mar 31, 2021 6.91% 4.24% 29.76 8.33 15.74
51. Apr 30, 2021 2.39% 5.24% 0.88 15.09 3.64
52. May 31, 2021 0.41% 0.55% 1.09 0.65 0.84
53. Jun 30, 2021 -7.48% 2.22% 79.81 0.75 -7.71
54. Jul 31, 2021 -1.73% 2.27% 10.15 0.84 -2.92
55. Aug 31, 2021 -10.18% 2.90% 135.19 2.38 -17.92
56. Sep 30, 2021 13.43% -4.76% 143.39 37.39 -73.22
57. Oct 31, 2021 0.31% 6.91% 1.30 30.87 -6.33
58. Nov 30, 2021 -2.02% -0.83% 12.04 4.80 7.60
59. Dec 31, 2021 12.19% 4.36% 115.23 9.02 32.24
Total (Σ): 7,918.62 1,164.17 1,893.98

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VarianceEXPE = Σ(REXPE,tREXPE)2 ÷ (59 – 1)
= 7,918.62 ÷ (59 – 1)
= 136.53

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (59 – 1)
= 1,164.17 ÷ (59 – 1)
= 20.07

CovarianceEXPE, S&P 500 = Σ(REXPE,tREXPE)×(RS&P 500,tRS&P 500) ÷ (59 – 1)
= 1,893.98 ÷ (59 – 1)
= 32.65


Systematic Risk (β) Estimation

Microsoft Excel
VarianceEXPE 136.53
VarianceS&P 500 20.07
CovarianceEXPE, S&P 500 32.65
Correlation coefficientEXPE, S&P 5001 0.62
βEXPE2 1.63
αEXPE3 -0.76%

Calculations

1 Correlation coefficientEXPE, S&P 500
= CovarianceEXPE, S&P 500 ÷ (Standard deviationEXPE × Standard deviationS&P 500)
= 32.65 ÷ (11.68% × 4.48%)
= 0.62

2 βEXPE
= CovarianceEXPE, S&P 500 ÷ VarianceS&P 500
= 32.65 ÷ 20.07
= 1.63

3 αEXPE
= AverageEXPE – βEXPE × AverageS&P 500
= 1.45%1.63 × 1.36%
= -0.76%


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 Expedia Group Inc. common stock βEXPE 1.63
 
Expected rate of return on Expedia Group Inc. common stock3 E(REXPE) 19.49%

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(REXPE) = RF + βEXPE [E(RM) – RF]
= 4.68% + 1.63 [13.78%4.68%]
= 19.49%