Stock Analysis on Net

FedEx Corp. (NYSE:FDX)

$24.99

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 FedEx Corp. common stock.


Rates of Return

FedEx Corp., monthly rates of return

Microsoft Excel
FedEx Corp. (FDX) Standard & Poor’s 500 (S&P 500)
t Date PriceFDX,t1 DividendFDX,t1 RFDX,t2 PriceS&P 500,t RS&P 500,t3
Jun 30, 2018
1. Jul 31, 2018
2. Aug 31, 2018
3. Sep 30, 2018
. . . . . . .
. . . . . . .
. . . . . . .
70. Apr 30, 2024
71. May 31, 2024
Average (R):
Standard deviation:
FedEx Corp. (FDX) Standard & Poor’s 500 (S&P 500)
t Date PriceFDX,t1 DividendFDX,t1 RFDX,t2 PriceS&P 500,t RS&P 500,t3
Jun 30, 2018
1. Jul 31, 2018
2. Aug 31, 2018
3. Sep 30, 2018
4. Oct 31, 2018
5. Nov 30, 2018
6. Dec 31, 2018
7. Jan 31, 2019
8. Feb 28, 2019
9. Mar 31, 2019
10. Apr 30, 2019
11. May 31, 2019
12. Jun 30, 2019
13. Jul 31, 2019
14. Aug 31, 2019
15. Sep 30, 2019
16. Oct 31, 2019
17. Nov 30, 2019
18. Dec 31, 2019
19. Jan 31, 2020
20. Feb 29, 2020
21. Mar 31, 2020
22. Apr 30, 2020
23. May 31, 2020
24. Jun 30, 2020
25. Jul 31, 2020
26. Aug 31, 2020
27. Sep 30, 2020
28. Oct 31, 2020
29. Nov 30, 2020
30. Dec 31, 2020
31. Jan 31, 2021
32. Feb 28, 2021
33. Mar 31, 2021
34. Apr 30, 2021
35. May 31, 2021
36. Jun 30, 2021
37. Jul 31, 2021
38. Aug 31, 2021
39. Sep 30, 2021
40. Oct 31, 2021
41. Nov 30, 2021
42. Dec 31, 2021
43. Jan 31, 2022
44. Feb 28, 2022
45. Mar 31, 2022
46. Apr 30, 2022
47. May 31, 2022
48. Jun 30, 2022
49. Jul 31, 2022
50. Aug 31, 2022
51. Sep 30, 2022
52. Oct 31, 2022
53. Nov 30, 2022
54. Dec 31, 2022
55. Jan 31, 2023
56. Feb 28, 2023
57. Mar 31, 2023
58. Apr 30, 2023
59. May 31, 2023
60. Jun 30, 2023
61. Jul 31, 2023
62. Aug 31, 2023
63. Sep 30, 2023
64. Oct 31, 2023
65. Nov 30, 2023
66. Dec 31, 2023
67. Jan 31, 2024
68. Feb 29, 2024
69. Mar 31, 2024
70. Apr 30, 2024
71. May 31, 2024
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 FDX during period t

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


Variance and Covariance

FedEx Corp., calculation of variance and covariance of returns

Microsoft Excel
t Date RFDX,t RS&P 500,t (RFDX,tRFDX)2 (RS&P 500,tRS&P 500)2 (RFDX,tRFDX)×(RS&P 500,tRS&P 500)
1. Jul 31, 2018
2. Aug 31, 2018
3. Sep 30, 2018
. . . . . . .
. . . . . . .
. . . . . . .
70. Apr 30, 2024
71. May 31, 2024
Total (Σ):
t Date RFDX,t RS&P 500,t (RFDX,tRFDX)2 (RS&P 500,tRS&P 500)2 (RFDX,tRFDX)×(RS&P 500,tRS&P 500)
1. Jul 31, 2018
2. Aug 31, 2018
3. Sep 30, 2018
4. Oct 31, 2018
5. Nov 30, 2018
6. Dec 31, 2018
7. Jan 31, 2019
8. Feb 28, 2019
9. Mar 31, 2019
10. Apr 30, 2019
11. May 31, 2019
12. Jun 30, 2019
13. Jul 31, 2019
14. Aug 31, 2019
15. Sep 30, 2019
16. Oct 31, 2019
17. Nov 30, 2019
18. Dec 31, 2019
19. Jan 31, 2020
20. Feb 29, 2020
21. Mar 31, 2020
22. Apr 30, 2020
23. May 31, 2020
24. Jun 30, 2020
25. Jul 31, 2020
26. Aug 31, 2020
27. Sep 30, 2020
28. Oct 31, 2020
29. Nov 30, 2020
30. Dec 31, 2020
31. Jan 31, 2021
32. Feb 28, 2021
33. Mar 31, 2021
34. Apr 30, 2021
35. May 31, 2021
36. Jun 30, 2021
37. Jul 31, 2021
38. Aug 31, 2021
39. Sep 30, 2021
40. Oct 31, 2021
41. Nov 30, 2021
42. Dec 31, 2021
43. Jan 31, 2022
44. Feb 28, 2022
45. Mar 31, 2022
46. Apr 30, 2022
47. May 31, 2022
48. Jun 30, 2022
49. Jul 31, 2022
50. Aug 31, 2022
51. Sep 30, 2022
52. Oct 31, 2022
53. Nov 30, 2022
54. Dec 31, 2022
55. Jan 31, 2023
56. Feb 28, 2023
57. Mar 31, 2023
58. Apr 30, 2023
59. May 31, 2023
60. Jun 30, 2023
61. Jul 31, 2023
62. Aug 31, 2023
63. Sep 30, 2023
64. Oct 31, 2023
65. Nov 30, 2023
66. Dec 31, 2023
67. Jan 31, 2024
68. Feb 29, 2024
69. Mar 31, 2024
70. Apr 30, 2024
71. May 31, 2024
Total (Σ):

Show all

VarianceFDX = Σ(RFDX,tRFDX)2 ÷ (71 – 1)
= ÷ (71 – 1)
=

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

CovarianceFDX, S&P 500 = Σ(RFDX,tRFDX)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= ÷ (71 – 1)
=


Systematic Risk (β) Estimation

Microsoft Excel
VarianceFDX
VarianceS&P 500
CovarianceFDX, S&P 500
Correlation coefficientFDX, S&P 5001
βFDX2
αFDX3

Calculations

1 Correlation coefficientFDX, S&P 500
= CovarianceFDX, S&P 500 ÷ (Standard deviationFDX × Standard deviationS&P 500)
= ÷ ( × )
=

2 βFDX
= CovarianceFDX, S&P 500 ÷ VarianceS&P 500
= ÷
=

3 αFDX
= AverageFDX – βFDX × 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 FedEx Corp. common stock βFDX
 
Expected rate of return on FedEx Corp. common stock3 E(RFDX)

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(RFDX) = RF + βFDX [E(RM) – RF]
= + []
=