Stock Analysis on Net

General Mills Inc. (NYSE:GIS)

This company has been moved to the archive! The financial data has not been updated since December 18, 2019.

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 General Mills Inc. common stock.


Rates of Return

General Mills Inc., monthly rates of return

Microsoft Excel
General Mills Inc. (GIS) Standard & Poor’s 500 (S&P 500)
t Date PriceGIS,t1 DividendGIS,t1 RGIS,t2 PriceS&P 500,t RS&P 500,t3
Jun 30, 2013 $48.53 1,606.28
1. Jul 31, 2013 $52.00 $0.38 7.93% 1,685.73 4.95%
2. Aug 31, 2013 $49.32 -5.15% 1,632.97 -3.13%
3. Sep 30, 2013 $47.92 -2.84% 1,681.55 2.97%
. . . . . . .
. . . . . . .
. . . . . . .
70. Apr 30, 2019 $51.47 $0.49 0.41% 2,945.83 3.93%
71. May 31, 2019 $49.44 -3.94% 2,752.06 -6.58%
Average (R): 0.44% 0.82%
Standard deviation: 5.11% 3.30%
General Mills Inc. (GIS) Standard & Poor’s 500 (S&P 500)
t Date PriceGIS,t1 DividendGIS,t1 RGIS,t2 PriceS&P 500,t RS&P 500,t3
Jun 30, 2013 $48.53 1,606.28
1. Jul 31, 2013 $52.00 $0.38 7.93% 1,685.73 4.95%
2. Aug 31, 2013 $49.32 -5.15% 1,632.97 -3.13%
3. Sep 30, 2013 $47.92 -2.84% 1,681.55 2.97%
4. Oct 31, 2013 $50.42 $0.38 6.01% 1,756.54 4.46%
5. Nov 30, 2013 $50.43 0.02% 1,805.81 2.80%
6. Dec 31, 2013 $49.91 -1.03% 1,848.36 2.36%
7. Jan 31, 2014 $48.02 $0.38 -3.03% 1,782.59 -3.56%
8. Feb 28, 2014 $50.03 4.19% 1,859.45 4.31%
9. Mar 31, 2014 $51.82 3.58% 1,872.34 0.69%
10. Apr 30, 2014 $53.02 $0.41 3.11% 1,883.95 0.62%
11. May 31, 2014 $54.93 3.60% 1,923.57 2.10%
12. Jun 30, 2014 $52.54 -4.35% 1,960.23 1.91%
13. Jul 31, 2014 $50.15 $0.41 -3.77% 1,930.67 -1.51%
14. Aug 31, 2014 $53.38 6.44% 2,003.37 3.77%
15. Sep 30, 2014 $50.45 -5.49% 1,972.29 -1.55%
16. Oct 31, 2014 $51.96 $0.41 3.81% 2,018.05 2.32%
17. Nov 30, 2014 $52.75 1.52% 2,067.56 2.45%
18. Dec 31, 2014 $53.33 1.10% 2,058.90 -0.42%
19. Jan 31, 2015 $52.48 $0.41 -0.83% 1,994.99 -3.10%
20. Feb 28, 2015 $53.79 2.50% 2,104.50 5.49%
21. Mar 31, 2015 $56.60 5.22% 2,067.89 -1.74%
22. Apr 30, 2015 $55.34 $0.44 -1.45% 2,085.51 0.85%
23. May 31, 2015 $56.15 1.46% 2,107.39 1.05%
24. Jun 30, 2015 $55.72 -0.77% 2,063.11 -2.10%
25. Jul 31, 2015 $58.21 $0.44 5.26% 2,103.84 1.97%
26. Aug 31, 2015 $56.76 -2.49% 1,972.18 -6.26%
27. Sep 30, 2015 $56.13 -1.11% 1,920.03 -2.64%
28. Oct 31, 2015 $58.11 $0.44 4.31% 2,079.36 8.30%
29. Nov 30, 2015 $57.76 -0.60% 2,080.41 0.05%
30. Dec 31, 2015 $57.66 -0.17% 2,043.94 -1.75%
31. Jan 31, 2016 $56.51 $0.44 -1.23% 1,940.24 -5.07%
32. Feb 29, 2016 $58.85 4.14% 1,932.23 -0.41%
33. Mar 31, 2016 $63.35 7.65% 2,059.74 6.60%
34. Apr 30, 2016 $61.34 $0.46 -2.45% 2,065.30 0.27%
35. May 31, 2016 $62.78 2.35% 2,096.95 1.53%
36. Jun 30, 2016 $71.32 13.60% 2,098.86 0.09%
37. Jul 31, 2016 $71.89 $0.48 1.47% 2,173.60 3.56%
38. Aug 31, 2016 $70.82 -1.49% 2,170.95 -0.12%
39. Sep 30, 2016 $63.88 -9.80% 2,168.27 -0.12%
40. Oct 31, 2016 $61.98 $0.48 -2.22% 2,126.15 -1.94%
41. Nov 30, 2016 $60.94 -1.68% 2,198.81 3.42%
42. Dec 31, 2016 $61.77 1.36% 2,238.83 1.82%
43. Jan 31, 2017 $62.48 $0.48 1.93% 2,278.87 1.79%
44. Feb 28, 2017 $60.37 -3.38% 2,363.64 3.72%
45. Mar 31, 2017 $59.01 -2.25% 2,362.72 -0.04%
46. Apr 30, 2017 $57.51 $0.48 -1.73% 2,384.20 0.91%
47. May 31, 2017 $56.74 -1.34% 2,411.80 1.16%
48. Jun 30, 2017 $55.40 -2.36% 2,423.41 0.48%
49. Jul 31, 2017 $55.66 $0.49 1.35% 2,470.30 1.93%
50. Aug 31, 2017 $53.26 -4.31% 2,471.65 0.05%
51. Sep 30, 2017 $51.76 -2.82% 2,519.36 1.93%
52. Oct 31, 2017 $51.92 $0.49 1.26% 2,575.26 2.22%
53. Nov 30, 2017 $56.56 8.94% 2,647.58 2.81%
54. Dec 31, 2017 $59.29 4.83% 2,673.61 0.98%
55. Jan 31, 2018 $58.49 $0.49 -0.52% 2,823.81 5.62%
56. Feb 28, 2018 $50.55 -13.57% 2,713.83 -3.89%
57. Mar 31, 2018 $45.06 -10.86% 2,640.87 -2.69%
58. Apr 30, 2018 $43.74 $0.49 -1.84% 2,648.05 0.27%
59. May 31, 2018 $42.29 -3.32% 2,705.27 2.16%
60. Jun 30, 2018 $44.26 4.66% 2,718.37 0.48%
61. Jul 31, 2018 $46.06 $0.49 5.17% 2,816.29 3.60%
62. Aug 31, 2018 $46.01 -0.11% 2,901.52 3.03%
63. Sep 30, 2018 $42.92 -6.72% 2,913.98 0.43%
64. Oct 31, 2018 $43.80 $0.49 3.19% 2,711.74 -6.94%
65. Nov 30, 2018 $42.31 -3.40% 2,760.17 1.79%
66. Dec 31, 2018 $38.94 -7.97% 2,506.85 -9.18%
67. Jan 31, 2019 $44.44 $0.49 15.38% 2,704.10 7.87%
68. Feb 28, 2019 $47.13 6.05% 2,784.49 2.97%
69. Mar 31, 2019 $51.75 9.80% 2,834.40 1.79%
70. Apr 30, 2019 $51.47 $0.49 0.41% 2,945.83 3.93%
71. May 31, 2019 $49.44 -3.94% 2,752.06 -6.58%
Average (R): 0.44% 0.82%
Standard deviation: 5.11% 3.30%

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 GIS during period t

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


Variance and Covariance

General Mills Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RGIS,t RS&P 500,t (RGIS,tRGIS)2 (RS&P 500,tRS&P 500)2 (RGIS,tRGIS)×(RS&P 500,tRS&P 500)
1. Jul 31, 2013 7.93% 4.95% 56.15 17.06 30.95
2. Aug 31, 2013 -5.15% -3.13% 31.29 15.56 22.07
3. Sep 30, 2013 -2.84% 2.97% 10.75 4.66 -7.08
. . . . . . .
. . . . . . .
. . . . . . .
70. Apr 30, 2019 0.41% 3.93% 0.00 9.71 -0.11
71. May 31, 2019 -3.94% -6.58% 19.22 54.66 32.41
Total (Σ): 1,827.06 764.43 604.32
t Date RGIS,t RS&P 500,t (RGIS,tRGIS)2 (RS&P 500,tRS&P 500)2 (RGIS,tRGIS)×(RS&P 500,tRS&P 500)
1. Jul 31, 2013 7.93% 4.95% 56.15 17.06 30.95
2. Aug 31, 2013 -5.15% -3.13% 31.29 15.56 22.07
3. Sep 30, 2013 -2.84% 2.97% 10.75 4.66 -7.08
4. Oct 31, 2013 6.01% 4.46% 31.03 13.28 20.30
5. Nov 30, 2013 0.02% 2.80% 0.18 3.96 -0.84
6. Dec 31, 2013 -1.03% 2.36% 2.16 2.37 -2.27
7. Jan 31, 2014 -3.03% -3.56% 12.01 19.13 15.16
8. Feb 28, 2014 4.19% 4.31% 14.03 12.22 13.10
9. Mar 31, 2014 3.58% 0.69% 9.85 0.01 -0.38
10. Apr 30, 2014 3.11% 0.62% 7.11 0.04 -0.52
11. May 31, 2014 3.60% 2.10% 10.00 1.66 4.07
12. Jun 30, 2014 -4.35% 1.91% 22.95 1.19 -5.22
13. Jul 31, 2014 -3.77% -1.51% 17.71 5.40 9.78
14. Aug 31, 2014 6.44% 3.77% 36.01 8.70 17.70
15. Sep 30, 2014 -5.49% -1.55% 35.15 5.60 14.03
16. Oct 31, 2014 3.81% 2.32% 11.33 2.26 5.07
17. Nov 30, 2014 1.52% 2.45% 1.17 2.68 1.77
18. Dec 31, 2014 1.10% -0.42% 0.44 1.52 -0.81
19. Jan 31, 2015 -0.83% -3.10% 1.60 15.36 4.96
20. Feb 28, 2015 2.50% 5.49% 4.23 21.85 9.61
21. Mar 31, 2015 5.22% -1.74% 22.89 6.53 -12.22
22. Apr 30, 2015 -1.45% 0.85% 3.57 0.00 -0.07
23. May 31, 2015 1.46% 1.05% 1.05 0.05 0.24
24. Jun 30, 2015 -0.77% -2.10% 1.45 8.51 3.52
25. Jul 31, 2015 5.26% 1.97% 23.22 1.34 5.58
26. Aug 31, 2015 -2.49% -6.26% 8.59 50.03 20.73
27. Sep 30, 2015 -1.11% -2.64% 2.40 11.97 5.36
28. Oct 31, 2015 4.31% 8.30% 14.99 55.99 28.97
29. Nov 30, 2015 -0.60% 0.05% 1.09 0.59 0.80
30. Dec 31, 2015 -0.17% -1.75% 0.38 6.60 1.57
31. Jan 31, 2016 -1.23% -5.07% 2.79 34.68 9.84
32. Feb 29, 2016 4.14% -0.41% 13.70 1.51 -4.55
33. Mar 31, 2016 7.65% 6.60% 51.94 33.45 41.68
34. Apr 30, 2016 -2.45% 0.27% 8.33 0.30 1.57
35. May 31, 2016 2.35% 1.53% 3.64 0.51 1.37
36. Jun 30, 2016 13.60% 0.09% 173.27 0.52 -9.53
37. Jul 31, 2016 1.47% 3.56% 1.07 7.54 2.83
38. Aug 31, 2016 -1.49% -0.12% 3.72 0.88 1.81
39. Sep 30, 2016 -9.80% -0.12% 104.84 0.88 9.61
40. Oct 31, 2016 -2.22% -1.94% 7.09 7.61 7.34
41. Nov 30, 2016 -1.68% 3.42% 4.48 6.77 -5.51
42. Dec 31, 2016 1.36% 1.82% 0.85 1.01 0.93
43. Jan 31, 2017 1.93% 1.79% 2.21 0.95 1.45
44. Feb 28, 2017 -3.38% 3.72% 14.57 8.44 -11.09
45. Mar 31, 2017 -2.25% -0.04% 7.25 0.73 2.30
46. Apr 30, 2017 -1.73% 0.91% 4.70 0.01 -0.20
47. May 31, 2017 -1.34% 1.16% 3.16 0.12 -0.61
48. Jun 30, 2017 -2.36% 0.48% 7.85 0.11 0.94
49. Jul 31, 2017 1.35% 1.93% 0.84 1.25 1.02
50. Aug 31, 2017 -4.31% 0.05% 22.58 0.58 3.61
51. Sep 30, 2017 -2.82% 1.93% 10.60 1.24 -3.63
52. Oct 31, 2017 1.26% 2.22% 0.67 1.97 1.15
53. Nov 30, 2017 8.94% 2.81% 72.20 3.97 16.93
54. Dec 31, 2017 4.83% 0.98% 19.25 0.03 0.74
55. Jan 31, 2018 -0.52% 5.62% 0.93 23.06 -4.62
56. Feb 28, 2018 -13.57% -3.89% 196.41 22.19 66.01
57. Mar 31, 2018 -10.86% -2.69% 127.70 12.28 39.59
58. Apr 30, 2018 -1.84% 0.27% 5.21 0.30 1.24
59. May 31, 2018 -3.32% 2.16% 14.10 1.81 -5.05
60. Jun 30, 2018 4.66% 0.48% 17.80 0.11 -1.40
61. Jul 31, 2018 5.17% 3.60% 22.41 7.77 13.19
62. Aug 31, 2018 -0.11% 3.03% 0.30 4.89 -1.21
63. Sep 30, 2018 -6.72% 0.43% 51.20 0.15 2.76
64. Oct 31, 2018 3.19% -6.94% 7.58 60.15 -21.35
65. Nov 30, 2018 -3.40% 1.79% 14.76 0.94 -3.73
66. Dec 31, 2018 -7.97% -9.18% 70.64 99.86 83.99
67. Jan 31, 2019 15.38% 7.87% 223.29 49.75 105.39
68. Feb 28, 2019 6.05% 2.97% 31.51 4.65 12.11
69. Mar 31, 2019 9.80% 1.79% 87.67 0.95 9.15
70. Apr 30, 2019 0.41% 3.93% 0.00 9.71 -0.11
71. May 31, 2019 -3.94% -6.58% 19.22 54.66 32.41
Total (Σ): 1,827.06 764.43 604.32

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VarianceGIS = Σ(RGIS,tRGIS)2 ÷ (71 – 1)
= 1,827.06 ÷ (71 – 1)
= 26.10

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (71 – 1)
= 764.43 ÷ (71 – 1)
= 10.92

CovarianceGIS, S&P 500 = Σ(RGIS,tRGIS)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= 604.32 ÷ (71 – 1)
= 8.63


Systematic Risk (β) Estimation

Microsoft Excel
VarianceGIS 26.10
VarianceS&P 500 10.92
CovarianceGIS, S&P 500 8.63
Correlation coefficientGIS, S&P 5001 0.51
βGIS2 0.79
αGIS3 -0.20%

Calculations

1 Correlation coefficientGIS, S&P 500
= CovarianceGIS, S&P 500 ÷ (Standard deviationGIS × Standard deviationS&P 500)
= 8.63 ÷ (5.11% × 3.30%)
= 0.51

2 βGIS
= CovarianceGIS, S&P 500 ÷ VarianceS&P 500
= 8.63 ÷ 10.92
= 0.79

3 αGIS
= AverageGIS – βGIS × AverageS&P 500
= 0.44%0.79 × 0.82%
= -0.20%


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 General Mills Inc. common stock βGIS 0.79
 
Expected rate of return on General Mills Inc. common stock3 E(RGIS) 11.88%

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(RGIS) = RF + βGIS [E(RM) – RF]
= 4.68% + 0.79 [13.78%4.68%]
= 11.88%