Capital Asset Pricing Model (CAPM)
Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Palantir Technologies Inc. common stock.
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Palantir Technologies Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2020
- Return on Assets (ROA) since 2020
- Total Asset Turnover since 2020
- Analysis of Debt
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Rates of Return
Palantir Technologies Inc., monthly rates of return
| Palantir Technologies Inc. (PLTR) | Standard & Poor’s 500 (S&P 500) | |||||
|---|---|---|---|---|---|---|
| t | Date | PricePLTR,t1 | DividendPLTR,t1 | RPLTR,t2 | PriceS&P 500,t | RS&P 500,t3 |
| Sep 30, 2020 | ||||||
| 1. | Oct 31, 2020 | |||||
| 2. | Nov 30, 2020 | |||||
| 3. | Dec 31, 2020 | |||||
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| 50. | Nov 30, 2024 | |||||
| 51. | Dec 31, 2024 | |||||
| Average (R): | ||||||
| Standard deviation: | ||||||
| Palantir Technologies Inc. (PLTR) | Standard & Poor’s 500 (S&P 500) | |||||
|---|---|---|---|---|---|---|
| t | Date | PricePLTR,t1 | DividendPLTR,t1 | RPLTR,t2 | PriceS&P 500,t | RS&P 500,t3 |
| Sep 30, 2020 | ||||||
| 1. | Oct 31, 2020 | |||||
| 2. | Nov 30, 2020 | |||||
| 3. | Dec 31, 2020 | |||||
| 4. | Jan 31, 2021 | |||||
| 5. | Feb 28, 2021 | |||||
| 6. | Mar 31, 2021 | |||||
| 7. | Apr 30, 2021 | |||||
| 8. | May 31, 2021 | |||||
| 9. | Jun 30, 2021 | |||||
| 10. | Jul 31, 2021 | |||||
| 11. | Aug 31, 2021 | |||||
| 12. | Sep 30, 2021 | |||||
| 13. | Oct 31, 2021 | |||||
| 14. | Nov 30, 2021 | |||||
| 15. | Dec 31, 2021 | |||||
| 16. | Jan 31, 2022 | |||||
| 17. | Feb 28, 2022 | |||||
| 18. | Mar 31, 2022 | |||||
| 19. | Apr 30, 2022 | |||||
| 20. | May 31, 2022 | |||||
| 21. | Jun 30, 2022 | |||||
| 22. | Jul 31, 2022 | |||||
| 23. | Aug 31, 2022 | |||||
| 24. | Sep 30, 2022 | |||||
| 25. | Oct 31, 2022 | |||||
| 26. | Nov 30, 2022 | |||||
| 27. | Dec 31, 2022 | |||||
| 28. | Jan 31, 2023 | |||||
| 29. | Feb 28, 2023 | |||||
| 30. | Mar 31, 2023 | |||||
| 31. | Apr 30, 2023 | |||||
| 32. | May 31, 2023 | |||||
| 33. | Jun 30, 2023 | |||||
| 34. | Jul 31, 2023 | |||||
| 35. | Aug 31, 2023 | |||||
| 36. | Sep 30, 2023 | |||||
| 37. | Oct 31, 2023 | |||||
| 38. | Nov 30, 2023 | |||||
| 39. | Dec 31, 2023 | |||||
| 40. | Jan 31, 2024 | |||||
| 41. | Feb 29, 2024 | |||||
| 42. | Mar 31, 2024 | |||||
| 43. | Apr 30, 2024 | |||||
| 44. | May 31, 2024 | |||||
| 45. | Jun 30, 2024 | |||||
| 46. | Jul 31, 2024 | |||||
| 47. | Aug 31, 2024 | |||||
| 48. | Sep 30, 2024 | |||||
| 49. | Oct 31, 2024 | |||||
| 50. | Nov 30, 2024 | |||||
| 51. | Dec 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 PLTR during period t
3 Rate of return on S&P 500 (the market portfolio proxy) during period t
Variance and Covariance
Palantir Technologies Inc., calculation of variance and covariance of returns
| t | Date | RPLTR,t | RS&P 500,t | (RPLTR,t–RPLTR)2 | (RS&P 500,t–RS&P 500)2 | (RPLTR,t–RPLTR)×(RS&P 500,t–RS&P 500) |
|---|---|---|---|---|---|---|
| 1. | Oct 31, 2020 | |||||
| 2. | Nov 30, 2020 | |||||
| 3. | Dec 31, 2020 | |||||
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| 50. | Nov 30, 2024 | |||||
| 51. | Dec 31, 2024 | |||||
| Total (Σ): | ||||||
| t | Date | RPLTR,t | RS&P 500,t | (RPLTR,t–RPLTR)2 | (RS&P 500,t–RS&P 500)2 | (RPLTR,t–RPLTR)×(RS&P 500,t–RS&P 500) |
|---|---|---|---|---|---|---|
| 1. | Oct 31, 2020 | |||||
| 2. | Nov 30, 2020 | |||||
| 3. | Dec 31, 2020 | |||||
| 4. | Jan 31, 2021 | |||||
| 5. | Feb 28, 2021 | |||||
| 6. | Mar 31, 2021 | |||||
| 7. | Apr 30, 2021 | |||||
| 8. | May 31, 2021 | |||||
| 9. | Jun 30, 2021 | |||||
| 10. | Jul 31, 2021 | |||||
| 11. | Aug 31, 2021 | |||||
| 12. | Sep 30, 2021 | |||||
| 13. | Oct 31, 2021 | |||||
| 14. | Nov 30, 2021 | |||||
| 15. | Dec 31, 2021 | |||||
| 16. | Jan 31, 2022 | |||||
| 17. | Feb 28, 2022 | |||||
| 18. | Mar 31, 2022 | |||||
| 19. | Apr 30, 2022 | |||||
| 20. | May 31, 2022 | |||||
| 21. | Jun 30, 2022 | |||||
| 22. | Jul 31, 2022 | |||||
| 23. | Aug 31, 2022 | |||||
| 24. | Sep 30, 2022 | |||||
| 25. | Oct 31, 2022 | |||||
| 26. | Nov 30, 2022 | |||||
| 27. | Dec 31, 2022 | |||||
| 28. | Jan 31, 2023 | |||||
| 29. | Feb 28, 2023 | |||||
| 30. | Mar 31, 2023 | |||||
| 31. | Apr 30, 2023 | |||||
| 32. | May 31, 2023 | |||||
| 33. | Jun 30, 2023 | |||||
| 34. | Jul 31, 2023 | |||||
| 35. | Aug 31, 2023 | |||||
| 36. | Sep 30, 2023 | |||||
| 37. | Oct 31, 2023 | |||||
| 38. | Nov 30, 2023 | |||||
| 39. | Dec 31, 2023 | |||||
| 40. | Jan 31, 2024 | |||||
| 41. | Feb 29, 2024 | |||||
| 42. | Mar 31, 2024 | |||||
| 43. | Apr 30, 2024 | |||||
| 44. | May 31, 2024 | |||||
| 45. | Jun 30, 2024 | |||||
| 46. | Jul 31, 2024 | |||||
| 47. | Aug 31, 2024 | |||||
| 48. | Sep 30, 2024 | |||||
| 49. | Oct 31, 2024 | |||||
| 50. | Nov 30, 2024 | |||||
| 51. | Dec 31, 2024 | |||||
| Total (Σ): | ||||||
Show all
VariancePLTR = Σ(RPLTR,t–RPLTR)2 ÷ (51 – 1)
= ÷ (51 – 1)
=
VarianceS&P 500 = Σ(RS&P 500,t–RS&P 500)2 ÷ (51 – 1)
= ÷ (51 – 1)
=
CovariancePLTR, S&P 500 = Σ(RPLTR,t–RPLTR)×(RS&P 500,t–RS&P 500) ÷ (51 – 1)
= ÷ (51 – 1)
=
Systematic Risk (β) Estimation
| VariancePLTR | |
| VarianceS&P 500 | |
| CovariancePLTR, S&P 500 | |
| Correlation coefficientPLTR, S&P 5001 | |
| βPLTR2 | |
| αPLTR3 |
Calculations
1 Correlation coefficientPLTR, S&P 500
= CovariancePLTR, S&P 500 ÷ (Standard deviationPLTR × Standard deviationS&P 500)
= ÷ ( × )
=
2 βPLTR
= CovariancePLTR, S&P 500 ÷ VarianceS&P 500
= ÷
=
3 αPLTR
= AveragePLTR – βPLTR × AverageS&P 500
= – ×
=
Expected Rate of Return
| Assumptions | ||
| Rate of return on LT Treasury Composite1 | RF | |
| Expected rate of return on market portfolio2 | E(RM) | |
| Systematic risk (β) of Palantir Technologies Inc. common stock | βPLTR | |
| Expected rate of return on Palantir Technologies Inc. common stock3 | E(RPLTR) | |
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).
3 E(RPLTR) = RF + βPLTR [E(RM) – RF]
= + [ – ]
=