Stock Analysis on Net

Mastercard Inc. (NYSE:MA)

This company has been moved to the archive! The financial data has not been updated since April 27, 2023.

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Rates of Return

Mastercard Inc., monthly rates of return

Microsoft Excel
Mastercard Inc. (MA) Standard & Poor’s 500 (S&P 500)
t Date PriceMA,t1 DividendMA,t1 RMA,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2018 $169.00 2,823.81
1. Feb 28, 2018 $175.76 4.00% 2,713.83 -3.89%
2. Mar 31, 2018 $175.16 -0.34% 2,640.87 -2.69%
3. Apr 30, 2018 $178.27 $0.25 1.92% 2,648.05 0.27%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2022 $356.40 8.60% 4,080.11 5.38%
59. Dec 31, 2022 $347.73 -2.43% 3,839.50 -5.90%
Average (R): 1.59% 0.67%
Standard deviation: 8.04% 5.40%
Mastercard Inc. (MA) Standard & Poor’s 500 (S&P 500)
t Date PriceMA,t1 DividendMA,t1 RMA,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2018 $169.00 2,823.81
1. Feb 28, 2018 $175.76 4.00% 2,713.83 -3.89%
2. Mar 31, 2018 $175.16 -0.34% 2,640.87 -2.69%
3. Apr 30, 2018 $178.27 $0.25 1.92% 2,648.05 0.27%
4. May 31, 2018 $190.12 6.65% 2,705.27 2.16%
5. Jun 30, 2018 $196.52 3.37% 2,718.37 0.48%
6. Jul 31, 2018 $198.00 $0.25 0.88% 2,816.29 3.60%
7. Aug 31, 2018 $215.56 8.87% 2,901.52 3.03%
8. Sep 30, 2018 $222.61 3.27% 2,913.98 0.43%
9. Oct 31, 2018 $197.67 $0.25 -11.09% 2,711.74 -6.94%
10. Nov 30, 2018 $201.07 1.72% 2,760.17 1.79%
11. Dec 31, 2018 $188.65 -6.18% 2,506.85 -9.18%
12. Jan 31, 2019 $211.13 $0.33 12.09% 2,704.10 7.87%
13. Feb 28, 2019 $224.77 6.46% 2,784.49 2.97%
14. Mar 31, 2019 $235.45 4.75% 2,834.40 1.79%
15. Apr 30, 2019 $254.24 $0.33 8.12% 2,945.83 3.93%
16. May 31, 2019 $251.49 -1.08% 2,752.06 -6.58%
17. Jun 30, 2019 $264.53 5.19% 2,941.76 6.89%
18. Jul 31, 2019 $272.27 $0.33 3.05% 2,980.38 1.31%
19. Aug 31, 2019 $281.37 3.34% 2,926.46 -1.81%
20. Sep 30, 2019 $271.57 -3.48% 2,976.74 1.72%
21. Oct 31, 2019 $276.81 $0.33 2.05% 3,037.56 2.04%
22. Nov 30, 2019 $292.23 5.57% 3,140.98 3.40%
23. Dec 31, 2019 $298.59 2.18% 3,230.78 2.86%
24. Jan 31, 2020 $315.94 $0.40 5.94% 3,225.52 -0.16%
25. Feb 29, 2020 $290.25 -8.13% 2,954.22 -8.41%
26. Mar 31, 2020 $241.56 -16.78% 2,584.59 -12.51%
27. Apr 30, 2020 $274.97 $0.40 14.00% 2,912.43 12.68%
28. May 31, 2020 $300.89 9.43% 3,044.31 4.53%
29. Jun 30, 2020 $295.70 -1.72% 3,100.29 1.84%
30. Jul 31, 2020 $308.53 $0.40 4.47% 3,271.12 5.51%
31. Aug 31, 2020 $358.19 16.10% 3,500.31 7.01%
32. Sep 30, 2020 $338.17 -5.59% 3,363.00 -3.92%
33. Oct 31, 2020 $288.64 $0.40 -14.53% 3,269.96 -2.77%
34. Nov 30, 2020 $336.51 16.58% 3,621.63 10.75%
35. Dec 31, 2020 $356.94 6.07% 3,756.07 3.71%
36. Jan 31, 2021 $316.29 $0.44 -11.27% 3,714.24 -1.11%
37. Feb 28, 2021 $353.85 11.88% 3,811.15 2.61%
38. Mar 31, 2021 $356.05 0.62% 3,972.89 4.24%
39. Apr 30, 2021 $382.06 $0.44 7.43% 4,181.17 5.24%
40. May 31, 2021 $360.58 -5.62% 4,204.11 0.55%
41. Jun 30, 2021 $365.09 1.25% 4,297.50 2.22%
42. Jul 31, 2021 $385.94 $0.44 5.83% 4,395.26 2.27%
43. Aug 31, 2021 $346.23 -10.29% 4,522.68 2.90%
44. Sep 30, 2021 $347.68 0.42% 4,307.54 -4.76%
45. Oct 31, 2021 $335.52 $0.44 -3.37% 4,605.38 6.91%
46. Nov 30, 2021 $314.92 -6.14% 4,567.00 -0.83%
47. Dec 31, 2021 $359.32 14.10% 4,766.18 4.36%
48. Jan 31, 2022 $386.38 $0.49 7.67% 4,515.55 -5.26%
49. Feb 28, 2022 $360.82 -6.62% 4,373.94 -3.14%
50. Mar 31, 2022 $357.38 -0.95% 4,530.41 3.58%
51. Apr 30, 2022 $363.38 $0.49 1.82% 4,131.93 -8.80%
52. May 31, 2022 $357.87 -1.52% 4,132.15 0.01%
53. Jun 30, 2022 $315.48 -11.85% 3,785.38 -8.39%
54. Jul 31, 2022 $353.79 $0.49 12.30% 4,130.29 9.11%
55. Aug 31, 2022 $324.37 -8.32% 3,955.00 -4.24%
56. Sep 30, 2022 $284.34 -12.34% 3,585.62 -9.34%
57. Oct 31, 2022 $328.18 $0.49 15.59% 3,871.98 7.99%
58. Nov 30, 2022 $356.40 8.60% 4,080.11 5.38%
59. Dec 31, 2022 $347.73 -2.43% 3,839.50 -5.90%
Average (R): 1.59% 0.67%
Standard deviation: 8.04% 5.40%

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1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of MA during period t

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


Variance and Covariance

Mastercard Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RMA,t RS&P 500,t (RMA,tRMA)2 (RS&P 500,tRS&P 500)2 (RMA,tRMA)×(RS&P 500,tRS&P 500)
1. Feb 28, 2018 4.00% -3.89% 5.80 20.81 -10.98
2. Mar 31, 2018 -0.34% -2.69% 3.74 11.26 6.49
3. Apr 30, 2018 1.92% 0.27% 0.11 0.16 -0.13
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2022 8.60% 5.38% 49.10 22.17 32.99
59. Dec 31, 2022 -2.43% -5.90% 16.20 43.08 26.42
Total (Σ): 3,750.56 1,691.48 1,838.87
t Date RMA,t RS&P 500,t (RMA,tRMA)2 (RS&P 500,tRS&P 500)2 (RMA,tRMA)×(RS&P 500,tRS&P 500)
1. Feb 28, 2018 4.00% -3.89% 5.80 20.81 -10.98
2. Mar 31, 2018 -0.34% -2.69% 3.74 11.26 6.49
3. Apr 30, 2018 1.92% 0.27% 0.11 0.16 -0.13
4. May 31, 2018 6.65% 2.16% 25.55 2.23 7.55
5. Jun 30, 2018 3.37% 0.48% 3.15 0.03 -0.32
6. Jul 31, 2018 0.88% 3.60% 0.51 8.62 -2.09
7. Aug 31, 2018 8.87% 3.03% 52.95 5.57 17.17
8. Sep 30, 2018 3.27% 0.43% 2.82 0.06 -0.40
9. Oct 31, 2018 -11.09% -6.94% 160.86 57.87 96.48
10. Nov 30, 2018 1.72% 1.79% 0.02 1.25 0.14
11. Dec 31, 2018 -6.18% -9.18% 60.36 96.91 76.48
12. Jan 31, 2019 12.09% 7.87% 110.23 51.87 75.61
13. Feb 28, 2019 6.46% 2.97% 23.70 5.32 11.23
14. Mar 31, 2019 4.75% 1.79% 9.98 1.27 3.56
15. Apr 30, 2019 8.12% 3.93% 42.62 10.66 21.31
16. May 31, 2019 -1.08% -6.58% 7.15 52.48 19.37
17. Jun 30, 2019 5.19% 6.89% 12.91 38.77 22.37
18. Jul 31, 2019 3.05% 1.31% 2.13 0.42 0.94
19. Aug 31, 2019 3.34% -1.81% 3.06 6.13 -4.33
20. Sep 30, 2019 -3.48% 1.72% 25.76 1.11 -5.34
21. Oct 31, 2019 2.05% 2.04% 0.21 1.89 0.63
22. Nov 30, 2019 5.57% 3.40% 15.83 7.50 10.89
23. Dec 31, 2019 2.18% 2.86% 0.34 4.81 1.28
24. Jan 31, 2020 5.94% -0.16% 18.94 0.69 -3.61
25. Feb 29, 2020 -8.13% -8.41% 94.54 82.40 88.27
26. Mar 31, 2020 -16.78% -12.51% 337.36 173.67 242.05
27. Apr 30, 2020 14.00% 12.68% 153.87 144.43 149.07
28. May 31, 2020 9.43% 4.53% 61.38 14.91 30.25
29. Jun 30, 2020 -1.72% 1.84% 11.00 1.37 -3.89
30. Jul 31, 2020 4.47% 5.51% 8.31 23.46 13.96
31. Aug 31, 2020 16.10% 7.01% 210.35 40.19 91.95
32. Sep 30, 2020 -5.59% -3.92% 51.57 21.06 32.96
33. Oct 31, 2020 -14.53% -2.77% 259.86 11.79 55.34
34. Nov 30, 2020 16.58% 10.75% 224.78 101.77 151.24
35. Dec 31, 2020 6.07% 3.71% 20.06 9.28 13.64
36. Jan 31, 2021 -11.27% -1.11% 165.31 3.17 22.89
37. Feb 28, 2021 11.88% 2.61% 105.74 3.77 19.97
38. Mar 31, 2021 0.62% 4.24% 0.94 12.80 -3.47
39. Apr 30, 2021 7.43% 5.24% 34.07 20.94 26.71
40. May 31, 2021 -5.62% 0.55% 52.05 0.01 0.85
41. Jun 30, 2021 1.25% 2.22% 0.12 2.42 -0.53
42. Jul 31, 2021 5.83% 2.27% 17.97 2.59 6.82
43. Aug 31, 2021 -10.29% 2.90% 141.16 4.98 -26.52
44. Sep 30, 2021 0.42% -4.76% 1.38 29.42 6.36
45. Oct 31, 2021 -3.37% 6.91% 24.63 39.03 -31.01
46. Nov 30, 2021 -6.14% -0.83% 59.78 2.25 11.60
47. Dec 31, 2021 14.10% 4.36% 156.42 13.65 46.21
48. Jan 31, 2022 7.67% -5.26% 36.91 35.11 -36.00
49. Feb 28, 2022 -6.62% -3.14% 67.36 14.46 31.21
50. Mar 31, 2022 -0.95% 3.58% 6.48 8.47 -7.41
51. Apr 30, 2022 1.82% -8.80% 0.05 89.54 -2.12
52. May 31, 2022 -1.52% 0.01% 9.66 0.44 2.06
53. Jun 30, 2022 -11.85% -8.39% 180.56 82.06 121.72
54. Jul 31, 2022 12.30% 9.11% 114.63 71.32 90.42
55. Aug 31, 2022 -8.32% -4.24% 98.16 24.11 48.65
56. Sep 30, 2022 -12.34% -9.34% 194.13 100.12 139.42
57. Oct 31, 2022 15.59% 7.99% 195.96 53.58 102.46
58. Nov 30, 2022 8.60% 5.38% 49.10 22.17 32.99
59. Dec 31, 2022 -2.43% -5.90% 16.20 43.08 26.42
Total (Σ): 3,750.56 1,691.48 1,838.87

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VarianceMA = Σ(RMA,tRMA)2 ÷ (59 – 1)
= 3,750.56 ÷ (59 – 1)
= 64.66

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (59 – 1)
= 1,691.48 ÷ (59 – 1)
= 29.16

CovarianceMA, S&P 500 = Σ(RMA,tRMA)×(RS&P 500,tRS&P 500) ÷ (59 – 1)
= 1,838.87 ÷ (59 – 1)
= 31.70


Systematic Risk (β) Estimation

Microsoft Excel
VarianceMA 64.66
VarianceS&P 500 29.16
CovarianceMA, S&P 500 31.70
Correlation coefficientMA, S&P 5001 0.73
βMA2 1.09
αMA3 0.87%

Calculations

1 Correlation coefficientMA, S&P 500
= CovarianceMA, S&P 500 ÷ (Standard deviationMA × Standard deviationS&P 500)
= 31.70 ÷ (8.04% × 5.40%)
= 0.73

2 βMA
= CovarianceMA, S&P 500 ÷ VarianceS&P 500
= 31.70 ÷ 29.16
= 1.09

3 αMA
= AverageMA – βMA × AverageS&P 500
= 1.59%1.09 × 0.67%
= 0.87%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.43%
Expected rate of return on market portfolio2 E(RM) 13.60%
Systematic risk (β) of Mastercard Inc. common stock βMA 1.09
 
Expected rate of return on Mastercard Inc. common stock3 E(RMA) 14.40%

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(RMA) = RF + βMA [E(RM) – RF]
= 4.43% + 1.09 [13.60%4.43%]
= 14.40%