Paying users zone. Data is covered by 
.
Get 1 month access to Colgate-Palmolive Co. for $15.99, or
get full access to entire website for at least 3 months from $49.99.
We accept:
Colgate-Palmolive Co. (CL)
Capital Asset Pricing Model (CAPM)
Difficulty: Intermediate
Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Colgate-Palmolive Co.’s common stock.
Rates of Return
Colgate-Palmolive Co., monthly rates of return
| Colgate-Palmolive Co. (CL) | Standard & Poor’s 500 (S&P 500) | |||||
|---|---|---|---|---|---|---|
| t | Date | PriceCL,t1 | DividendCL,t1 | RCL,t2 | PriceS&P 500,t | RS&P 500,t3 |
| Jan 31, 2014 | |
|
||||
| 1. | Feb 28, 2014 | |
|
|
|
|
| 2. | Mar 31, 2014 | |
|
|
|
|
| 3. | Apr 30, 2014 | |
|
|
|
|
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| . | . | . | . | . | . | . |
| 58. | Nov 30, 2018 | |
|
|
|
|
| 59. | Dec 31, 2018 | |
|
|
|
|
| Average: | |
|
||||
| Standard Deviation: | |
|
||||
| Colgate-Palmolive Co. (CL) | Standard & Poor’s 500 (S&P 500) | |||||
|---|---|---|---|---|---|---|
| t | Date | PriceCL,t1 | DividendCL,t1 | RCL,t2 | PriceS&P 500,t | RS&P 500,t3 |
| Jan 31, 2014 | |
|
||||
| 1. | Feb 28, 2014 | |
|
|
|
|
| 2. | Mar 31, 2014 | |
|
|
|
|
| 3. | Apr 30, 2014 | |
|
|
|
|
| 4. | May 31, 2014 | |
|
|
|
|
| 5. | Jun 30, 2014 | |
|
|
|
|
| 6. | Jul 31, 2014 | |
|
|
|
|
| 7. | Aug 31, 2014 | |
|
|
|
|
| 8. | Sep 30, 2014 | |
|
|
|
|
| 9. | Oct 31, 2014 | |
|
|
|
|
| 10. | Nov 30, 2014 | |
|
|
|
|
| 11. | Dec 31, 2014 | |
|
|
|
|
| 12. | Jan 31, 2015 | |
|
|
|
|
| 13. | Feb 28, 2015 | |
|
|
|
|
| 14. | Mar 31, 2015 | |
|
|
|
|
| 15. | Apr 30, 2015 | |
|
|
|
|
| 16. | May 31, 2015 | |
|
|
|
|
| 17. | Jun 30, 2015 | |
|
|
|
|
| 18. | Jul 31, 2015 | |
|
|
|
|
| 19. | Aug 31, 2015 | |
|
|
|
|
| 20. | Sep 30, 2015 | |
|
|
|
|
| 21. | Oct 31, 2015 | |
|
|
|
|
| 22. | Nov 30, 2015 | |
|
|
|
|
| 23. | Dec 31, 2015 | |
|
|
|
|
| 24. | Jan 31, 2016 | |
|
|
|
|
| 25. | Feb 29, 2016 | |
|
|
|
|
| 26. | Mar 31, 2016 | |
|
|
|
|
| 27. | Apr 30, 2016 | |
|
|
|
|
| 28. | May 31, 2016 | |
|
|
|
|
| 29. | Jun 30, 2016 | |
|
|
|
|
| 30. | Jul 31, 2016 | |
|
|
|
|
| 31. | Aug 31, 2016 | |
|
|
|
|
| 32. | Sep 30, 2016 | |
|
|
|
|
| 33. | Oct 31, 2016 | |
|
|
|
|
| 34. | Nov 30, 2016 | |
|
|
|
|
| 35. | Dec 31, 2016 | |
|
|
|
|
| 36. | Jan 31, 2017 | |
|
|
|
|
| 37. | Feb 28, 2017 | |
|
|
|
|
| 38. | Mar 31, 2017 | |
|
|
|
|
| 39. | Apr 30, 2017 | |
|
|
|
|
| 40. | May 31, 2017 | |
|
|
|
|
| 41. | Jun 30, 2017 | |
|
|
|
|
| 42. | Jul 31, 2017 | |
|
|
|
|
| 43. | Aug 31, 2017 | |
|
|
|
|
| 44. | Sep 30, 2017 | |
|
|
|
|
| 45. | Oct 31, 2017 | |
|
|
|
|
| 46. | Nov 30, 2017 | |
|
|
|
|
| 47. | Dec 31, 2017 | |
|
|
|
|
| 48. | Jan 31, 2018 | |
|
|
|
|
| 49. | Feb 28, 2018 | |
|
|
|
|
| 50. | Mar 31, 2018 | |
|
|
|
|
| 51. | Apr 30, 2018 | |
|
|
|
|
| 52. | May 31, 2018 | |
|
|
|
|
| 53. | Jun 30, 2018 | |
|
|
|
|
| 54. | Jul 31, 2018 | |
|
|
|
|
| 55. | Aug 31, 2018 | |
|
|
|
|
| 56. | Sep 30, 2018 | |
|
|
|
|
| 57. | Oct 31, 2018 | |
|
|
|
|
| 58. | Nov 30, 2018 | |
|
|
|
|
| 59. | Dec 31, 2018 | |
|
|
|
|
| Average: | |
|
||||
| Standard Deviation: | |
|
||||
Show All
1 Data in USD $ per share of common stock, adjusted for splits and stock dividends.
2 Rate of return on common stock of CL during period t
3 Rate of return on S&P 500 (the market portfolio proxy) during period t
Systematic Risk (β) Estimation
| VarianceCL | |
| VarianceS&P 500 | |
| CovarianceCL, S&P 500 | |
| Correlation CoefficientCL, S&P 5001 | |
| βCL2 | |
| αCL3 | |
Calculations
1 CovarianceCL, S&P 500 ÷ (Standard DeviationCL × Standard DeviationS&P 500)
= ÷ ( × )
2 CovarianceCL, S&P 500 ÷ VarianceS&P 500
= ÷
3 AverageCL – βCL × 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 Colgate-Palmolive Co.’s common stock | βCL | |
| Expected rate of return on Colgate-Palmolive Co.’s common stock3 | E(RCL) | |
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).
Calculations
3 E(RCL) = RF + βCL [E(RM) – RF]
= + [ – ]
=