Stock Analysis on Net

Salesforce Inc. (NYSE:CRM)

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Rates of Return

Salesforce Inc., monthly rates of return

Microsoft Excel
Salesforce Inc. (CRM) Standard & Poor’s 500 (S&P 500)
t Date PriceCRM,t1 DividendCRM,t1 RCRM,t2 PriceS&P 500,t RS&P 500,t3
Feb 28, 2018 $116.25 2,713.83
1. Mar 31, 2018 $116.30 0.04% 2,640.87 -2.69%
2. Apr 30, 2018 $120.99 4.03% 2,648.05 0.27%
3. May 31, 2018 $129.33 6.89% 2,705.27 2.16%
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2023 $263.14 4.46% 4,769.83 4.42%
71. Jan 31, 2024 $281.09 6.82% 4,845.65 1.59%
Average (R): 1.74% 0.95%
Standard deviation: 10.20% 5.18%
Salesforce Inc. (CRM) Standard & Poor’s 500 (S&P 500)
t Date PriceCRM,t1 DividendCRM,t1 RCRM,t2 PriceS&P 500,t RS&P 500,t3
Feb 28, 2018 $116.25 2,713.83
1. Mar 31, 2018 $116.30 0.04% 2,640.87 -2.69%
2. Apr 30, 2018 $120.99 4.03% 2,648.05 0.27%
3. May 31, 2018 $129.33 6.89% 2,705.27 2.16%
4. Jun 30, 2018 $136.40 5.47% 2,718.37 0.48%
5. Jul 31, 2018 $137.15 0.55% 2,816.29 3.60%
6. Aug 31, 2018 $152.68 11.32% 2,901.52 3.03%
7. Sep 30, 2018 $159.03 4.16% 2,913.98 0.43%
8. Oct 31, 2018 $137.24 -13.70% 2,711.74 -6.94%
9. Nov 30, 2018 $142.76 4.02% 2,760.17 1.79%
10. Dec 31, 2018 $136.97 -4.06% 2,506.85 -9.18%
11. Jan 31, 2019 $151.97 10.95% 2,704.10 7.87%
12. Feb 28, 2019 $163.65 7.69% 2,784.49 2.97%
13. Mar 31, 2019 $158.37 -3.23% 2,834.40 1.79%
14. Apr 30, 2019 $165.35 4.41% 2,945.83 3.93%
15. May 31, 2019 $151.41 -8.43% 2,752.06 -6.58%
16. Jun 30, 2019 $151.73 0.21% 2,941.76 6.89%
17. Jul 31, 2019 $154.50 1.83% 2,980.38 1.31%
18. Aug 31, 2019 $156.07 1.02% 2,926.46 -1.81%
19. Sep 30, 2019 $148.44 -4.89% 2,976.74 1.72%
20. Oct 31, 2019 $156.49 5.42% 3,037.56 2.04%
21. Nov 30, 2019 $162.89 4.09% 3,140.98 3.40%
22. Dec 31, 2019 $162.64 -0.15% 3,230.78 2.86%
23. Jan 31, 2020 $182.31 12.09% 3,225.52 -0.16%
24. Feb 29, 2020 $170.40 -6.53% 2,954.22 -8.41%
25. Mar 31, 2020 $143.98 -15.50% 2,584.59 -12.51%
26. Apr 30, 2020 $161.95 12.48% 2,912.43 12.68%
27. May 31, 2020 $174.79 7.93% 3,044.31 4.53%
28. Jun 30, 2020 $187.33 7.17% 3,100.29 1.84%
29. Jul 31, 2020 $194.85 4.01% 3,271.12 5.51%
30. Aug 31, 2020 $272.65 39.93% 3,500.31 7.01%
31. Sep 30, 2020 $251.32 -7.82% 3,363.00 -3.92%
32. Oct 31, 2020 $232.27 -7.58% 3,269.96 -2.77%
33. Nov 30, 2020 $245.80 5.83% 3,621.63 10.75%
34. Dec 31, 2020 $222.53 -9.47% 3,756.07 3.71%
35. Jan 31, 2021 $225.56 1.36% 3,714.24 -1.11%
36. Feb 28, 2021 $216.50 -4.02% 3,811.15 2.61%
37. Mar 31, 2021 $211.87 -2.14% 3,972.89 4.24%
38. Apr 30, 2021 $230.32 8.71% 4,181.17 5.24%
39. May 31, 2021 $238.10 3.38% 4,204.11 0.55%
40. Jun 30, 2021 $244.27 2.59% 4,297.50 2.22%
41. Jul 31, 2021 $241.93 -0.96% 4,395.26 2.27%
42. Aug 31, 2021 $265.27 9.65% 4,522.68 2.90%
43. Sep 30, 2021 $271.22 2.24% 4,307.54 -4.76%
44. Oct 31, 2021 $299.69 10.50% 4,605.38 6.91%
45. Nov 30, 2021 $284.96 -4.92% 4,567.00 -0.83%
46. Dec 31, 2021 $254.13 -10.82% 4,766.18 4.36%
47. Jan 31, 2022 $232.63 -8.46% 4,515.55 -5.26%
48. Feb 28, 2022 $210.53 -9.50% 4,373.94 -3.14%
49. Mar 31, 2022 $212.32 0.85% 4,530.41 3.58%
50. Apr 30, 2022 $175.94 -17.13% 4,131.93 -8.80%
51. May 31, 2022 $160.24 -8.92% 4,132.15 0.01%
52. Jun 30, 2022 $165.04 3.00% 3,785.38 -8.39%
53. Jul 31, 2022 $184.02 11.50% 4,130.29 9.11%
54. Aug 31, 2022 $156.12 -15.16% 3,955.00 -4.24%
55. Sep 30, 2022 $143.84 -7.87% 3,585.62 -9.34%
56. Oct 31, 2022 $162.59 13.04% 3,871.98 7.99%
57. Nov 30, 2022 $160.25 -1.44% 4,080.11 5.38%
58. Dec 31, 2022 $132.59 -17.26% 3,839.50 -5.90%
59. Jan 31, 2023 $167.97 26.68% 4,076.60 6.18%
60. Feb 28, 2023 $163.61 -2.60% 3,970.15 -2.61%
61. Mar 31, 2023 $199.78 22.11% 4,109.31 3.51%
62. Apr 30, 2023 $198.37 -0.71% 4,169.48 1.46%
63. May 31, 2023 $223.38 12.61% 4,179.83 0.25%
64. Jun 30, 2023 $211.26 -5.43% 4,376.86 4.71%
65. Jul 31, 2023 $225.01 6.51% 4,588.96 4.85%
66. Aug 31, 2023 $221.46 -1.58% 4,507.66 -1.77%
67. Sep 30, 2023 $202.78 -8.43% 4,288.05 -4.87%
68. Oct 31, 2023 $200.83 -0.96% 4,193.80 -2.20%
69. Nov 30, 2023 $251.90 25.43% 4,567.80 8.92%
70. Dec 31, 2023 $263.14 4.46% 4,769.83 4.42%
71. Jan 31, 2024 $281.09 6.82% 4,845.65 1.59%
Average (R): 1.74% 0.95%
Standard deviation: 10.20% 5.18%

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 CRM during period t

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


Variance and Covariance

Salesforce Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RCRM,t RS&P 500,t (RCRM,tRCRM)2 (RS&P 500,tRS&P 500)2 (RCRM,tRCRM)×(RS&P 500,tRS&P 500)
1. Mar 31, 2018 0.04% -2.69% 2.87 13.26 6.17
2. Apr 30, 2018 4.03% 0.27% 5.27 0.46 -1.56
3. May 31, 2018 6.89% 2.16% 26.59 1.46 6.23
. . . . . . .
. . . . . . .
. . . . . . .
70. Dec 31, 2023 4.46% 4.42% 7.43 12.04 9.46
71. Jan 31, 2024 6.82% 1.59% 25.85 0.41 3.24
Total (Σ): 7,284.09 1,876.53 2,389.03
t Date RCRM,t RS&P 500,t (RCRM,tRCRM)2 (RS&P 500,tRS&P 500)2 (RCRM,tRCRM)×(RS&P 500,tRS&P 500)
1. Mar 31, 2018 0.04% -2.69% 2.87 13.26 6.17
2. Apr 30, 2018 4.03% 0.27% 5.27 0.46 -1.56
3. May 31, 2018 6.89% 2.16% 26.59 1.46 6.23
4. Jun 30, 2018 5.47% 0.48% 13.91 0.22 -1.75
5. Jul 31, 2018 0.55% 3.60% 1.41 7.02 -3.14
6. Aug 31, 2018 11.32% 3.03% 91.90 4.30 19.88
7. Sep 30, 2018 4.16% 0.43% 5.87 0.27 -1.27
8. Oct 31, 2018 -13.70% -6.94% 238.35 62.30 121.86
9. Nov 30, 2018 4.02% 1.79% 5.22 0.69 1.90
10. Dec 31, 2018 -4.06% -9.18% 33.55 102.63 58.68
11. Jan 31, 2019 10.95% 7.87% 84.91 47.82 63.72
12. Feb 28, 2019 7.69% 2.97% 35.39 4.08 12.02
13. Mar 31, 2019 -3.23% 1.79% 24.63 0.70 -4.17
14. Apr 30, 2019 4.41% 3.93% 7.13 8.87 7.95
15. May 31, 2019 -8.43% -6.58% 103.38 56.71 76.57
16. Jun 30, 2019 0.21% 6.89% 2.33 35.28 -9.06
17. Jul 31, 2019 1.83% 1.31% 0.01 0.13 0.03
18. Aug 31, 2019 1.02% -1.81% 0.52 7.63 1.99
19. Sep 30, 2019 -4.89% 1.72% 43.90 0.59 -5.07
20. Oct 31, 2019 5.42% 2.04% 13.59 1.19 4.02
21. Nov 30, 2019 4.09% 3.40% 5.54 6.01 5.77
22. Dec 31, 2019 -0.15% 2.86% 3.57 3.63 -3.60
23. Jan 31, 2020 12.09% -0.16% 107.27 1.24 -11.56
24. Feb 29, 2020 -6.53% -8.41% 68.39 87.68 77.44
25. Mar 31, 2020 -15.50% -12.51% 297.27 181.30 232.15
26. Apr 30, 2020 12.48% 12.68% 115.43 137.63 126.04
27. May 31, 2020 7.93% 4.53% 38.34 12.78 22.14
28. Jun 30, 2020 7.17% 1.84% 29.57 0.78 4.82
29. Jul 31, 2020 4.01% 5.51% 5.19 20.77 10.38
30. Aug 31, 2020 39.93% 7.01% 1,458.58 36.65 231.19
31. Sep 30, 2020 -7.82% -3.92% 91.39 23.77 46.61
32. Oct 31, 2020 -7.58% -2.77% 86.80 13.83 34.65
33. Nov 30, 2020 5.83% 10.75% 16.71 96.07 40.07
34. Dec 31, 2020 -9.47% 3.71% 125.53 7.61 -30.91
35. Jan 31, 2021 1.36% -1.11% 0.14 4.27 0.78
36. Feb 28, 2021 -4.02% 2.61% 33.10 2.74 -9.53
37. Mar 31, 2021 -2.14% 4.24% 15.02 10.83 -12.75
38. Apr 30, 2021 8.71% 5.24% 48.60 18.40 29.90
39. May 31, 2021 3.38% 0.55% 2.69 0.16 -0.66
40. Jun 30, 2021 2.59% 2.22% 0.73 1.61 1.08
41. Jul 31, 2021 -0.96% 2.27% 7.26 1.75 -3.56
42. Aug 31, 2021 9.65% 2.90% 62.58 3.79 15.39
43. Sep 30, 2021 2.24% -4.76% 0.26 32.60 -2.89
44. Oct 31, 2021 10.50% 6.91% 76.74 35.54 52.22
45. Nov 30, 2021 -4.92% -0.83% 44.25 3.19 11.88
46. Dec 31, 2021 -10.82% 4.36% 157.65 11.62 -42.80
47. Jan 31, 2022 -8.46% -5.26% 103.98 38.58 63.34
48. Feb 28, 2022 -9.50% -3.14% 126.27 16.72 45.95
49. Mar 31, 2022 0.85% 3.58% 0.79 6.89 -2.33
50. Apr 30, 2022 -17.13% -8.80% 356.13 95.04 183.97
51. May 31, 2022 -8.92% 0.01% 113.64 0.90 10.10
52. Jun 30, 2022 3.00% -8.39% 1.58 87.33 -11.76
53. Jul 31, 2022 11.50% 9.11% 95.32 66.56 79.66
54. Aug 31, 2022 -15.16% -4.24% 285.55 27.01 87.82
55. Sep 30, 2022 -7.87% -9.34% 92.21 105.94 98.83
56. Oct 31, 2022 13.04% 7.99% 127.66 49.47 79.47
57. Nov 30, 2022 -1.44% 5.38% 10.09 19.56 -14.05
58. Dec 31, 2022 -17.26% -5.90% 360.90 46.92 130.13
59. Jan 31, 2023 26.68% 6.18% 622.35 27.27 130.28
60. Feb 28, 2023 -2.60% -2.61% 18.77 12.70 15.44
61. Mar 31, 2023 22.11% 3.51% 414.96 6.51 51.99
62. Apr 30, 2023 -0.71% 1.46% 5.97 0.26 -1.25
63. May 31, 2023 12.61% 0.25% 118.18 0.50 -7.66
64. Jun 30, 2023 -5.43% 4.71% 51.30 14.14 -26.94
65. Jul 31, 2023 6.51% 4.85% 22.77 15.16 18.58
66. Aug 31, 2023 -1.58% -1.77% 10.99 7.42 9.03
67. Sep 30, 2023 -8.43% -4.87% 103.46 33.93 59.25
68. Oct 31, 2023 -0.96% -2.20% 7.28 9.93 8.50
69. Nov 30, 2023 25.43% 8.92% 561.34 63.44 188.71
70. Dec 31, 2023 4.46% 4.42% 7.43 12.04 9.46
71. Jan 31, 2024 6.82% 1.59% 25.85 0.41 3.24
Total (Σ): 7,284.09 1,876.53 2,389.03

Show all

VarianceCRM = Σ(RCRM,tRCRM)2 ÷ (71 – 1)
= 7,284.09 ÷ (71 – 1)
= 104.06

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (71 – 1)
= 1,876.53 ÷ (71 – 1)
= 26.81

CovarianceCRM, S&P 500 = Σ(RCRM,tRCRM)×(RS&P 500,tRS&P 500) ÷ (71 – 1)
= 2,389.03 ÷ (71 – 1)
= 34.13


Systematic Risk (β) Estimation

Microsoft Excel
VarianceCRM 104.06
VarianceS&P 500 26.81
CovarianceCRM, S&P 500 34.13
Correlation coefficientCRM, S&P 5001 0.65
βCRM2 1.27
αCRM3 0.52%

Calculations

1 Correlation coefficientCRM, S&P 500
= CovarianceCRM, S&P 500 ÷ (Standard deviationCRM × Standard deviationS&P 500)
= 34.13 ÷ (10.20% × 5.18%)
= 0.65

2 βCRM
= CovarianceCRM, S&P 500 ÷ VarianceS&P 500
= 34.13 ÷ 26.81
= 1.27

3 αCRM
= AverageCRM – βCRM × AverageS&P 500
= 1.74%1.27 × 0.95%
= 0.52%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.42%
Expected rate of return on market portfolio2 E(RM) 13.60%
Systematic risk (β) of Salesforce Inc. common stock βCRM 1.27
 
Expected rate of return on Salesforce Inc. common stock3 E(RCRM) 16.11%

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(RCRM) = RF + βCRM [E(RM) – RF]
= 4.42% + 1.27 [13.60%4.42%]
= 16.11%