Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Stryker Corp. (NYSE:SYK)

Capital Asset Pricing Model (CAPM)

Intermediate level

Rates of Return

Stryker Corp., monthly rates of return

Microsoft Excel LibreOffice Calc
Stryker Corp. (SYK) Standard & Poor’s 500 (S&P 500)
t Date PriceSYK,t1 DividendSYK,t1 RSYK,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2015 91.05 1,994.99
1. Feb 28, 2015 94.75 4.06% 2,104.50 5.49%
2. Mar 31, 2015 92.25 0.345 -2.27% 2,067.89 -1.74%
3. Apr 30, 2015 92.24 -0.01% 2,085.51 0.85%
. . . . . . .
. . . . . . .
. . . . . . .
58. Nov 30, 2019 204.86 -5.28% 3,140.98 3.40%
59. Dec 31, 2019 209.94 0.575 2.76% 3,230.78 2.86%
Average: 1.64% 0.88%
Standard deviation: 4.71% 3.45%
Stryker Corp. (SYK) Standard & Poor’s 500 (S&P 500)
t Date PriceSYK,t1 DividendSYK,t1 RSYK,t2 PriceS&P 500,t RS&P 500,t3
Jan 31, 2015 91.05 1,994.99
1. Feb 28, 2015 94.75 4.06% 2,104.50 5.49%
2. Mar 31, 2015 92.25 0.345 -2.27% 2,067.89 -1.74%
3. Apr 30, 2015 92.24 -0.01% 2,085.51 0.85%
4. May 31, 2015 96.13 4.22% 2,107.39 1.05%
5. Jun 30, 2015 95.57 0.345 -0.22% 2,063.11 -2.10%
6. Jul 31, 2015 102.27 7.01% 2,103.84 1.97%
7. Aug 31, 2015 98.65 -3.54% 1,972.18 -6.26%
8. Sep 30, 2015 94.10 0.345 -4.26% 1,920.03 -2.64%
9. Oct 31, 2015 95.62 1.62% 2,079.36 8.30%
10. Nov 30, 2015 96.46 0.88% 2,080.41 0.05%
11. Dec 31, 2015 92.94 0.38 -3.26% 2,043.94 -1.75%
12. Jan 31, 2016 99.15 6.68% 1,940.24 -5.07%
13. Feb 29, 2016 99.88 0.74% 1,932.23 -0.41%
14. Mar 31, 2016 107.29 0.38 7.80% 2,059.74 6.60%
15. Apr 30, 2016 109.01 1.60% 2,065.30 0.27%
16. May 31, 2016 111.16 1.97% 2,096.95 1.53%
17. Jun 30, 2016 119.83 0.38 8.14% 2,098.86 0.09%
18. Jul 31, 2016 116.28 -2.96% 2,173.60 3.56%
19. Aug 31, 2016 115.66 -0.53% 2,170.95 -0.12%
20. Sep 30, 2016 116.41 0.38 0.98% 2,168.27 -0.12%
21. Oct 31, 2016 115.35 -0.91% 2,126.15 -1.94%
22. Nov 30, 2016 113.66 -1.47% 2,198.81 3.42%
23. Dec 31, 2016 119.81 0.425 5.78% 2,238.83 1.82%
24. Jan 31, 2017 123.53 3.10% 2,278.87 1.79%
25. Feb 28, 2017 128.56 4.07% 2,363.64 3.72%
26. Mar 31, 2017 131.65 0.425 2.73% 2,362.72 -0.04%
27. Apr 30, 2017 136.37 3.59% 2,384.20 0.91%
28. May 31, 2017 142.96 4.83% 2,411.80 1.16%
29. Jun 30, 2017 138.78 0.425 -2.63% 2,423.41 0.48%
30. Jul 31, 2017 147.10 6.00% 2,470.30 1.93%
31. Aug 31, 2017 141.37 -3.90% 2,471.65 0.05%
32. Sep 30, 2017 142.02 0.425 0.76% 2,519.36 1.93%
33. Oct 31, 2017 154.87 9.05% 2,575.26 2.22%
34. Nov 30, 2017 156.00 0.73% 2,647.58 2.81%
35. Dec 31, 2017 154.84 0.47 -0.44% 2,673.61 0.98%
36. Jan 31, 2018 164.38 6.16% 2,823.81 5.62%
37. Feb 28, 2018 162.16 -1.35% 2,713.83 -3.89%
38. Mar 31, 2018 160.92 0.47 -0.47% 2,640.87 -2.69%
39. Apr 30, 2018 169.42 5.28% 2,648.05 0.27%
40. May 31, 2018 174.02 2.72% 2,705.27 2.16%
41. Jun 30, 2018 168.86 0.47 -2.70% 2,718.37 0.48%
42. Jul 31, 2018 163.25 -3.32% 2,816.29 3.60%
43. Aug 31, 2018 169.43 3.79% 2,901.52 3.03%
44. Sep 30, 2018 177.68 0.47 5.15% 2,913.98 0.43%
45. Oct 31, 2018 162.22 -8.70% 2,711.74 -6.94%
46. Nov 30, 2018 175.46 8.16% 2,760.17 1.79%
47. Dec 31, 2018 156.75 0.52 -10.37% 2,506.85 -9.18%
48. Jan 31, 2019 177.57 13.28% 2,704.10 7.87%
49. Feb 28, 2019 188.51 6.16% 2,784.49 2.97%
50. Mar 31, 2019 197.52 0.52 5.06% 2,834.40 1.79%
51. Apr 30, 2019 188.91 -4.36% 2,945.83 3.93%
52. May 31, 2019 183.24 -3.00% 2,752.06 -6.58%
53. Jun 30, 2019 205.58 0.52 12.48% 2,941.76 6.89%
54. Jul 31, 2019 209.78 2.04% 2,980.38 1.31%
55. Aug 31, 2019 220.66 5.19% 2,926.46 -1.81%
56. Sep 30, 2019 216.30 0.52 -1.74% 2,976.74 1.72%
57. Oct 31, 2019 216.27 -0.01% 3,037.56 2.04%
58. Nov 30, 2019 204.86 -5.28% 3,140.98 3.40%
59. Dec 31, 2019 209.94 0.575 2.76% 3,230.78 2.86%
Average: 1.64% 0.88%
Standard deviation: 4.71% 3.45%

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 SYK during period t

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


Systematic Risk (β) Estimation

Microsoft Excel LibreOffice Calc
VarianceSYK 22.21
VarianceS&P 500 11.88
CovarianceSYK, S&P 500 8.84
Correlation coefficientSYK, S&P 5001 0.54
βSYK2 0.74
αSYK3 0.99

Calculations

1 Correlation coefficientSYK, S&P 500
= CovarianceSYK, S&P 500 ÷ (Standard deviationSYK × Standard deviationS&P 500)
= 8.84 ÷ (4.71 × 3.45)

2 βSYK
= CovarianceSYK, S&P 500 ÷ VarianceS&P 500
= 8.84 ÷ 11.88

3 αSYK
= AverageSYK – βSYK × AverageS&P 500
= 1.640.74 × 0.88


Expected Rate of Return

Microsoft Excel LibreOffice Calc
Assumptions
Rate of return on LT Treasury Composite1 RF 1.38%
Expected rate of return on market portfolio2 E(RM) 12.45%
Systematic risk (β) of Stryker Corp.’s common stock βSYK 0.74
 
Expected rate of return on Stryker Corp.’s common stock3 E(RSYK) 9.63%

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(RSYK) = RF + βSYK [E(RM) – RF]
= 1.38% + 0.74 [12.45%1.38%]
= 9.63%