Stock Analysis on Net

Uber Technologies Inc. (NYSE:UBER)

$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 Uber Technologies Inc. common stock.

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Rates of Return

Uber Technologies Inc., monthly rates of return

Microsoft Excel
Uber Technologies Inc. (UBER) Standard & Poor’s 500 (S&P 500)
t Date PriceUBER,t1 DividendUBER,t1 RUBER,t2 PriceS&P 500,t RS&P 500,t3
May 31, 2019
1. Jun 30, 2019
2. Jul 31, 2019
3. Aug 31, 2019
. . . . . . .
. . . . . . .
. . . . . . .
54. Nov 30, 2023
55. Dec 31, 2023
Average (R):
Standard deviation:
Uber Technologies Inc. (UBER) Standard & Poor’s 500 (S&P 500)
t Date PriceUBER,t1 DividendUBER,t1 RUBER,t2 PriceS&P 500,t RS&P 500,t3
May 31, 2019
1. Jun 30, 2019
2. Jul 31, 2019
3. Aug 31, 2019
4. Sep 30, 2019
5. Oct 31, 2019
6. Nov 30, 2019
7. Dec 31, 2019
8. Jan 31, 2020
9. Feb 29, 2020
10. Mar 31, 2020
11. Apr 30, 2020
12. May 31, 2020
13. Jun 30, 2020
14. Jul 31, 2020
15. Aug 31, 2020
16. Sep 30, 2020
17. Oct 31, 2020
18. Nov 30, 2020
19. Dec 31, 2020
20. Jan 31, 2021
21. Feb 28, 2021
22. Mar 31, 2021
23. Apr 30, 2021
24. May 31, 2021
25. Jun 30, 2021
26. Jul 31, 2021
27. Aug 31, 2021
28. Sep 30, 2021
29. Oct 31, 2021
30. Nov 30, 2021
31. Dec 31, 2021
32. Jan 31, 2022
33. Feb 28, 2022
34. Mar 31, 2022
35. Apr 30, 2022
36. May 31, 2022
37. Jun 30, 2022
38. Jul 31, 2022
39. Aug 31, 2022
40. Sep 30, 2022
41. Oct 31, 2022
42. Nov 30, 2022
43. Dec 31, 2022
44. Jan 31, 2023
45. Feb 28, 2023
46. Mar 31, 2023
47. Apr 30, 2023
48. May 31, 2023
49. Jun 30, 2023
50. Jul 31, 2023
51. Aug 31, 2023
52. Sep 30, 2023
53. Oct 31, 2023
54. Nov 30, 2023
55. Dec 31, 2023
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 UBER during period t

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


Variance and Covariance

Uber Technologies Inc., calculation of variance and covariance of returns

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

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VarianceUBER = Σ(RUBER,tRUBER)2 ÷ (55 – 1)
= ÷ (55 – 1)
=

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (55 – 1)
= ÷ (55 – 1)
=

CovarianceUBER, S&P 500 = Σ(RUBER,tRUBER)×(RS&P 500,tRS&P 500) ÷ (55 – 1)
= ÷ (55 – 1)
=


Systematic Risk (β) Estimation

Microsoft Excel
VarianceUBER
VarianceS&P 500
CovarianceUBER, S&P 500
Correlation coefficientUBER, S&P 5001
βUBER2
αUBER3

Calculations

1 Correlation coefficientUBER, S&P 500
= CovarianceUBER, S&P 500 ÷ (Standard deviationUBER × Standard deviationS&P 500)
= ÷ ( × )
=

2 βUBER
= CovarianceUBER, S&P 500 ÷ VarianceS&P 500
= ÷
=

3 αUBER
= AverageUBER – βUBER × 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 Uber Technologies Inc. common stock βUBER
 
Expected rate of return on Uber Technologies Inc. common stock3 E(RUBER)

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(RUBER) = RF + βUBER [E(RM) – RF]
= + []
=