Stock Analysis on Net
Stock Analysis on Net

Microchip Technology Inc. (NASDAQ:MCHP)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 2, 2023.

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 Microchip Technology Inc. common stock.

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Rates of Return

Microchip Technology Inc., monthly rates of return

Microsoft Excel
Microchip Technology Inc. (MCHP) Standard & Poor’s 500 (S&P 500)
t Date PriceMCHP,t1 DividendMCHP,t1 RMCHP,t2 PriceS&P 500,t RS&P 500,t3
Apr 30, 2016
1. May 31, 2016
2. Jun 30, 2016
3. Jul 31, 2016
. . . . . . .
. . . . . . .
. . . . . . .
70. Feb 28, 2022
71. Mar 31, 2022
Average (R):
Standard deviation:
Microchip Technology Inc. (MCHP) Standard & Poor’s 500 (S&P 500)
t Date PriceMCHP,t1 DividendMCHP,t1 RMCHP,t2 PriceS&P 500,t RS&P 500,t3
Apr 30, 2016
1. May 31, 2016
2. Jun 30, 2016
3. Jul 31, 2016
4. Aug 31, 2016
5. Sep 30, 2016
6. Oct 31, 2016
7. Nov 30, 2016
8. Dec 31, 2016
9. Jan 31, 2017
10. Feb 28, 2017
11. Mar 31, 2017
12. Apr 30, 2017
13. May 31, 2017
14. Jun 30, 2017
15. Jul 31, 2017
16. Aug 31, 2017
17. Sep 30, 2017
18. Oct 31, 2017
19. Nov 30, 2017
20. Dec 31, 2017
21. Jan 31, 2018
22. Feb 28, 2018
23. Mar 31, 2018
24. Apr 30, 2018
25. May 31, 2018
26. Jun 30, 2018
27. Jul 31, 2018
28. Aug 31, 2018
29. Sep 30, 2018
30. Oct 31, 2018
31. Nov 30, 2018
32. Dec 31, 2018
33. Jan 31, 2019
34. Feb 28, 2019
35. Mar 31, 2019
36. Apr 30, 2019
37. May 31, 2019
38. Jun 30, 2019
39. Jul 31, 2019
40. Aug 31, 2019
41. Sep 30, 2019
42. Oct 31, 2019
43. Nov 30, 2019
44. Dec 31, 2019
45. Jan 31, 2020
46. Feb 29, 2020
47. Mar 31, 2020
48. Apr 30, 2020
49. May 31, 2020
50. Jun 30, 2020
51. Jul 31, 2020
52. Aug 31, 2020
53. Sep 30, 2020
54. Oct 31, 2020
55. Nov 30, 2020
56. Dec 31, 2020
57. Jan 31, 2021
58. Feb 28, 2021
59. Mar 31, 2021
60. Apr 30, 2021
61. May 31, 2021
62. Jun 30, 2021
63. Jul 31, 2021
64. Aug 31, 2021
65. Sep 30, 2021
66. Oct 31, 2021
67. Nov 30, 2021
68. Dec 31, 2021
69. Jan 31, 2022
70. Feb 28, 2022
71. Mar 31, 2022
Average (R):
Standard deviation:

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 MCHP during period t

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

Variance and Covariance

Microchip Technology Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RMCHP,t RS&P 500,t (RMCHP,t–RMCHP)2 (RS&P 500,t–RS&P 500)2 (RMCHP,t–RMCHP)×(RS&P 500,t–RS&P 500)
1. May 31, 2016
2. Jun 30, 2016
3. Jul 31, 2016
. . . . . . .
. . . . . . .
. . . . . . .
70. Feb 28, 2022
71. Mar 31, 2022
Total (Σ):
t Date RMCHP,t RS&P 500,t (RMCHP,t–RMCHP)2 (RS&P 500,t–RS&P 500)2 (RMCHP,t–RMCHP)×(RS&P 500,t–RS&P 500)
1. May 31, 2016
2. Jun 30, 2016
3. Jul 31, 2016
4. Aug 31, 2016
5. Sep 30, 2016
6. Oct 31, 2016
7. Nov 30, 2016
8. Dec 31, 2016
9. Jan 31, 2017
10. Feb 28, 2017
11. Mar 31, 2017
12. Apr 30, 2017
13. May 31, 2017
14. Jun 30, 2017
15. Jul 31, 2017
16. Aug 31, 2017
17. Sep 30, 2017
18. Oct 31, 2017
19. Nov 30, 2017
20. Dec 31, 2017
21. Jan 31, 2018
22. Feb 28, 2018
23. Mar 31, 2018
24. Apr 30, 2018
25. May 31, 2018
26. Jun 30, 2018
27. Jul 31, 2018
28. Aug 31, 2018
29. Sep 30, 2018
30. Oct 31, 2018
31. Nov 30, 2018
32. Dec 31, 2018
33. Jan 31, 2019
34. Feb 28, 2019
35. Mar 31, 2019
36. Apr 30, 2019
37. May 31, 2019
38. Jun 30, 2019
39. Jul 31, 2019
40. Aug 31, 2019
41. Sep 30, 2019
42. Oct 31, 2019
43. Nov 30, 2019
44. Dec 31, 2019
45. Jan 31, 2020
46. Feb 29, 2020
47. Mar 31, 2020
48. Apr 30, 2020
49. May 31, 2020
50. Jun 30, 2020
51. Jul 31, 2020
52. Aug 31, 2020
53. Sep 30, 2020
54. Oct 31, 2020
55. Nov 30, 2020
56. Dec 31, 2020
57. Jan 31, 2021
58. Feb 28, 2021
59. Mar 31, 2021
60. Apr 30, 2021
61. May 31, 2021
62. Jun 30, 2021
63. Jul 31, 2021
64. Aug 31, 2021
65. Sep 30, 2021
66. Oct 31, 2021
67. Nov 30, 2021
68. Dec 31, 2021
69. Jan 31, 2022
70. Feb 28, 2022
71. Mar 31, 2022
Total (Σ):

Show all

VarianceMCHP = Σ(RMCHP,t–RMCHP)2 ÷ (71 – 1)
= ÷ (71 – 1)
=

VarianceS&P 500 = Σ(RS&P 500,t–RS&P 500)2 ÷ (71 – 1)
= ÷ (71 – 1)
=

CovarianceMCHP, S&P 500 = Σ(RMCHP,t–RMCHP)×(RS&P 500,t–RS&P 500) ÷ (71 – 1)
= ÷ (71 – 1)
=

Systematic Risk (β) Estimation

Microsoft Excel
VarianceMCHP
VarianceS&P 500
CovarianceMCHP, S&P 500
Correlation coefficientMCHP, S&P 5001
βMCHP2
αMCHP3

Calculations

1 Correlation coefficientMCHP, S&P 500
= CovarianceMCHP, S&P 500 ÷ (Standard deviationMCHP × Standard deviationS&P 500)
= ÷ ( × )
=

2 βMCHP
= CovarianceMCHP, S&P 500 ÷ VarianceS&P 500
= ÷
=

3 αMCHP
= AverageMCHP – βMCHP × AverageS&P 500
= – ×
=

Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF
Expected rate of return on market portfolio2 E(RM)
Systematic risk (β) of Microchip Technology Inc. common stock βMCHP
 
Expected rate of return on Microchip Technology Inc. common stock3 E(RMCHP)

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(RMCHP) = RF + βMCHP [E(RM) – RF]
= + [ – ]
=