Stock Analysis on Net
Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

$22.49

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

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 Walgreens Boots Alliance Inc. common stock.

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Rates of Return

Walgreens Boots Alliance Inc., monthly rates of return

Microsoft Excel
Walgreens Boots Alliance Inc. (WBA) Standard & Poor’s 500 (S&P 500)
t Date PriceWBA,t1 DividendWBA,t1 RWBA,t2 PriceS&P 500,t RS&P 500,t3
Sep 30, 2013
1. Oct 31, 2013
2. Nov 30, 2013
3. Dec 31, 2013
. . . . . . .
. . . . . . .
. . . . . . .
70. Jul 31, 2019
71. Aug 31, 2019
Average (R):
Standard deviation:
Walgreens Boots Alliance Inc. (WBA) Standard & Poor’s 500 (S&P 500)
t Date PriceWBA,t1 DividendWBA,t1 RWBA,t2 PriceS&P 500,t RS&P 500,t3
Sep 30, 2013
1. Oct 31, 2013
2. Nov 30, 2013
3. Dec 31, 2013
4. Jan 31, 2014
5. Feb 28, 2014
6. Mar 31, 2014
7. Apr 30, 2014
8. May 31, 2014
9. Jun 30, 2014
10. Jul 31, 2014
11. Aug 31, 2014
12. Sep 30, 2014
13. Oct 31, 2014
14. Nov 30, 2014
15. Dec 31, 2014
16. Jan 31, 2015
17. Feb 28, 2015
18. Mar 31, 2015
19. Apr 30, 2015
20. May 31, 2015
21. Jun 30, 2015
22. Jul 31, 2015
23. Aug 31, 2015
24. Sep 30, 2015
25. Oct 31, 2015
26. Nov 30, 2015
27. Dec 31, 2015
28. Jan 31, 2016
29. Feb 29, 2016
30. Mar 31, 2016
31. Apr 30, 2016
32. May 31, 2016
33. Jun 30, 2016
34. Jul 31, 2016
35. Aug 31, 2016
36. Sep 30, 2016
37. Oct 31, 2016
38. Nov 30, 2016
39. Dec 31, 2016
40. Jan 31, 2017
41. Feb 28, 2017
42. Mar 31, 2017
43. Apr 30, 2017
44. May 31, 2017
45. Jun 30, 2017
46. Jul 31, 2017
47. Aug 31, 2017
48. Sep 30, 2017
49. Oct 31, 2017
50. Nov 30, 2017
51. Dec 31, 2017
52. Jan 31, 2018
53. Feb 28, 2018
54. Mar 31, 2018
55. Apr 30, 2018
56. May 31, 2018
57. Jun 30, 2018
58. Jul 31, 2018
59. Aug 31, 2018
60. Sep 30, 2018
61. Oct 31, 2018
62. Nov 30, 2018
63. Dec 31, 2018
64. Jan 31, 2019
65. Feb 28, 2019
66. Mar 31, 2019
67. Apr 30, 2019
68. May 31, 2019
69. Jun 30, 2019
70. Jul 31, 2019
71. Aug 31, 2019
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 WBA during period t

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

Variance and Covariance

Walgreens Boots Alliance Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RWBA,t RS&P 500,t (RWBA,t–RWBA)2 (RS&P 500,t–RS&P 500)2 (RWBA,t–RWBA)×(RS&P 500,t–RS&P 500)
1. Oct 31, 2013
2. Nov 30, 2013
3. Dec 31, 2013
. . . . . . .
. . . . . . .
. . . . . . .
70. Jul 31, 2019
71. Aug 31, 2019
Total (Σ):
t Date RWBA,t RS&P 500,t (RWBA,t–RWBA)2 (RS&P 500,t–RS&P 500)2 (RWBA,t–RWBA)×(RS&P 500,t–RS&P 500)
1. Oct 31, 2013
2. Nov 30, 2013
3. Dec 31, 2013
4. Jan 31, 2014
5. Feb 28, 2014
6. Mar 31, 2014
7. Apr 30, 2014
8. May 31, 2014
9. Jun 30, 2014
10. Jul 31, 2014
11. Aug 31, 2014
12. Sep 30, 2014
13. Oct 31, 2014
14. Nov 30, 2014
15. Dec 31, 2014
16. Jan 31, 2015
17. Feb 28, 2015
18. Mar 31, 2015
19. Apr 30, 2015
20. May 31, 2015
21. Jun 30, 2015
22. Jul 31, 2015
23. Aug 31, 2015
24. Sep 30, 2015
25. Oct 31, 2015
26. Nov 30, 2015
27. Dec 31, 2015
28. Jan 31, 2016
29. Feb 29, 2016
30. Mar 31, 2016
31. Apr 30, 2016
32. May 31, 2016
33. Jun 30, 2016
34. Jul 31, 2016
35. Aug 31, 2016
36. Sep 30, 2016
37. Oct 31, 2016
38. Nov 30, 2016
39. Dec 31, 2016
40. Jan 31, 2017
41. Feb 28, 2017
42. Mar 31, 2017
43. Apr 30, 2017
44. May 31, 2017
45. Jun 30, 2017
46. Jul 31, 2017
47. Aug 31, 2017
48. Sep 30, 2017
49. Oct 31, 2017
50. Nov 30, 2017
51. Dec 31, 2017
52. Jan 31, 2018
53. Feb 28, 2018
54. Mar 31, 2018
55. Apr 30, 2018
56. May 31, 2018
57. Jun 30, 2018
58. Jul 31, 2018
59. Aug 31, 2018
60. Sep 30, 2018
61. Oct 31, 2018
62. Nov 30, 2018
63. Dec 31, 2018
64. Jan 31, 2019
65. Feb 28, 2019
66. Mar 31, 2019
67. Apr 30, 2019
68. May 31, 2019
69. Jun 30, 2019
70. Jul 31, 2019
71. Aug 31, 2019
Total (Σ):

Show all

VarianceWBA = Σ(RWBA,t–RWBA)2 ÷ (71 – 1)
= ÷ (71 – 1)
=

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

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

Systematic Risk (β) Estimation

Microsoft Excel
VarianceWBA
VarianceS&P 500
CovarianceWBA, S&P 500
Correlation coefficientWBA, S&P 5001
βWBA2
αWBA3

Calculations

1 Correlation coefficientWBA, S&P 500
= CovarianceWBA, S&P 500 ÷ (Standard deviationWBA × Standard deviationS&P 500)
= ÷ ( × )
=

2 βWBA
= CovarianceWBA, S&P 500 ÷ VarianceS&P 500
= ÷
=

3 αWBA
= AverageWBA – βWBA × 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 Walgreens Boots Alliance Inc. common stock βWBA
 
Expected rate of return on Walgreens Boots Alliance Inc. common stock3 E(RWBA)

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(RWBA) = RF + βWBA [E(RM) – RF]
= + [ – ]
=