Stock Analysis on Net
Stock Analysis on Net

Visa Inc. (NYSE:V)

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

Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Visa Inc. common stock.

Rates of Return

Visa Inc., monthly rates of return

Microsoft Excel
Visa Inc. (V) Standard & Poor’s 500 (S&P 500)
t Date PriceV,t1 DividendV,t1 RV,t2 PriceS&P 500,t RS&P 500,t3
Oct 31, 2016 $82.51 2,126.15
1. Nov 30, 2016 $77.32 $0.165 -6.09% 2,198.81 3.42%
2. Dec 31, 2016 $78.02 0.91% 2,238.83 1.82%
3. Jan 31, 2017 $82.71 6.01% 2,278.87 1.79%
. . . . . . .
. . . . . . .
. . . . . . .
70. Aug 31, 2022 $198.71 $0.375 -6.14% 3,955.00 -4.24%
71. Sep 30, 2022 $177.65 -10.60% 3,585.62 -9.34%
Average (R): 1.33% 0.85%
Standard deviation: 6.20% 4.82%
Visa Inc. (V) Standard & Poor’s 500 (S&P 500)
t Date PriceV,t1 DividendV,t1 RV,t2 PriceS&P 500,t RS&P 500,t3
Oct 31, 2016 $82.51 2,126.15
1. Nov 30, 2016 $77.32 $0.165 -6.09% 2,198.81 3.42%
2. Dec 31, 2016 $78.02 0.91% 2,238.83 1.82%
3. Jan 31, 2017 $82.71 6.01% 2,278.87 1.79%
4. Feb 28, 2017 $87.94 $0.165 6.52% 2,363.64 3.72%
5. Mar 31, 2017 $88.87 1.06% 2,362.72 -0.04%
6. Apr 30, 2017 $91.22 2.64% 2,384.20 0.91%
7. May 31, 2017 $95.23 $0.165 4.58% 2,411.80 1.16%
8. Jun 30, 2017 $93.78 -1.52% 2,423.41 0.48%
9. Jul 31, 2017 $99.56 6.16% 2,470.30 1.93%
10. Aug 31, 2017 $103.52 $0.165 4.14% 2,471.65 0.05%
11. Sep 30, 2017 $105.24 1.66% 2,519.36 1.93%
12. Oct 31, 2017 $109.98 4.50% 2,575.26 2.22%
13. Nov 30, 2017 $112.59 $0.195 2.55% 2,647.58 2.81%
14. Dec 31, 2017 $114.02 1.27% 2,673.61 0.98%
15. Jan 31, 2018 $124.23 8.95% 2,823.81 5.62%
16. Feb 28, 2018 $122.94 $0.21 -0.87% 2,713.83 -3.89%
17. Mar 31, 2018 $119.62 -2.70% 2,640.87 -2.69%
18. Apr 30, 2018 $126.88 6.07% 2,648.05 0.27%
19. May 31, 2018 $130.72 $0.21 3.19% 2,705.27 2.16%
20. Jun 30, 2018 $132.45 1.32% 2,718.37 0.48%
21. Jul 31, 2018 $136.74 3.24% 2,816.29 3.60%
22. Aug 31, 2018 $146.89 $0.21 7.58% 2,901.52 3.03%
23. Sep 30, 2018 $150.09 2.18% 2,913.98 0.43%
24. Oct 31, 2018 $137.85 -8.16% 2,711.74 -6.94%
25. Nov 30, 2018 $141.71 $0.25 2.98% 2,760.17 1.79%
26. Dec 31, 2018 $131.94 -6.89% 2,506.85 -9.18%
27. Jan 31, 2019 $135.01 2.33% 2,704.10 7.87%
28. Feb 28, 2019 $148.12 $0.25 9.90% 2,784.49 2.97%
29. Mar 31, 2019 $156.19 5.45% 2,834.40 1.79%
30. Apr 30, 2019 $164.43 5.28% 2,945.83 3.93%
31. May 31, 2019 $161.33 $0.25 -1.73% 2,752.06 -6.58%
32. Jun 30, 2019 $173.55 7.57% 2,941.76 6.89%
33. Jul 31, 2019 $178.00 2.56% 2,980.38 1.31%
34. Aug 31, 2019 $180.82 $0.25 1.72% 2,926.46 -1.81%
35. Sep 30, 2019 $172.01 -4.87% 2,976.74 1.72%
36. Oct 31, 2019 $178.86 3.98% 3,037.56 2.04%
37. Nov 30, 2019 $184.51 $0.30 3.33% 3,140.98 3.40%
38. Dec 31, 2019 $187.90 1.84% 3,230.78 2.86%
39. Jan 31, 2020 $198.97 5.89% 3,225.52 -0.16%
40. Feb 29, 2020 $181.76 $0.30 -8.50% 2,954.22 -8.41%
41. Mar 31, 2020 $161.12 -11.36% 2,584.59 -12.51%
42. Apr 30, 2020 $178.72 10.92% 2,912.43 12.68%
43. May 31, 2020 $195.24 $0.30 9.41% 3,044.31 4.53%
44. Jun 30, 2020 $193.17 -1.06% 3,100.29 1.84%
45. Jul 31, 2020 $190.40 -1.43% 3,271.12 5.51%
46. Aug 31, 2020 $211.99 $0.30 11.50% 3,500.31 7.01%
47. Sep 30, 2020 $199.97 -5.67% 3,363.00 -3.92%
48. Oct 31, 2020 $181.71 -9.13% 3,269.96 -2.77%
49. Nov 30, 2020 $210.35 $0.32 15.94% 3,621.63 10.75%
50. Dec 31, 2020 $218.73 3.98% 3,756.07 3.71%
51. Jan 31, 2021 $193.25 -11.65% 3,714.24 -1.11%
52. Feb 28, 2021 $212.39 $0.32 10.07% 3,811.15 2.61%
53. Mar 31, 2021 $211.73 -0.31% 3,972.89 4.24%
54. Apr 30, 2021 $233.56 10.31% 4,181.17 5.24%
55. May 31, 2021 $227.30 $0.32 -2.54% 4,204.11 0.55%
56. Jun 30, 2021 $233.82 2.87% 4,297.50 2.22%
57. Jul 31, 2021 $246.39 5.38% 4,395.26 2.27%
58. Aug 31, 2021 $229.10 $0.32 -6.89% 4,522.68 2.90%
59. Sep 30, 2021 $222.75 -2.77% 4,307.54 -4.76%
60. Oct 31, 2021 $211.77 -4.93% 4,605.38 6.91%
61. Nov 30, 2021 $193.77 $0.375 -8.32% 4,567.00 -0.83%
62. Dec 31, 2021 $216.71 11.84% 4,766.18 4.36%
63. Jan 31, 2022 $226.17 4.37% 4,515.55 -5.26%
64. Feb 28, 2022 $216.12 $0.375 -4.28% 4,373.94 -3.14%
65. Mar 31, 2022 $221.77 2.61% 4,530.41 3.58%
66. Apr 30, 2022 $213.13 -3.90% 4,131.93 -8.80%
67. May 31, 2022 $212.17 $0.375 -0.27% 4,132.15 0.01%
68. Jun 30, 2022 $196.89 -7.20% 3,785.38 -8.39%
69. Jul 31, 2022 $212.11 7.73% 4,130.29 9.11%
70. Aug 31, 2022 $198.71 $0.375 -6.14% 3,955.00 -4.24%
71. Sep 30, 2022 $177.65 -10.60% 3,585.62 -9.34%
Average (R): 1.33% 0.85%
Standard deviation: 6.20% 4.82%

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 V during period t

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

Variance and Covariance

Visa Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RV,t RS&P 500,t (RV,t–RV)2 (RS&P 500,t–RS&P 500)2 (RV,t–RV)×(RS&P 500,t–RS&P 500)
1. Nov 30, 2016 -6.09% 3.42% 55.08 6.57 -19.02
2. Dec 31, 2016 0.91% 1.82% 0.18 0.93 -0.41
3. Jan 31, 2017 6.01% 1.79% 21.90 0.87 4.37
. . . . . . .
. . . . . . .
. . . . . . .
70. Aug 31, 2022 -6.14% -4.24% 55.83 25.99 38.10
71. Sep 30, 2022 -10.60% -9.34% 142.31 103.92 121.61
Total (Σ): 2,687.47 1,625.64 1,480.15
t Date RV,t RS&P 500,t (RV,t–RV)2 (RS&P 500,t–RS&P 500)2 (RV,t–RV)×(RS&P 500,t–RS&P 500)
1. Nov 30, 2016 -6.09% 3.42% 55.08 6.57 -19.02
2. Dec 31, 2016 0.91% 1.82% 0.18 0.93 -0.41
3. Jan 31, 2017 6.01% 1.79% 21.90 0.87 4.37
4. Feb 28, 2017 6.52% 3.72% 26.95 8.21 14.88
5. Mar 31, 2017 1.06% -0.04% 0.07 0.80 0.24
6. Apr 30, 2017 2.64% 0.91% 1.72 0.00 0.07
7. May 31, 2017 4.58% 1.16% 10.53 0.09 0.98
8. Jun 30, 2017 -1.52% 0.48% 8.14 0.14 1.06
9. Jul 31, 2017 6.16% 1.93% 23.35 1.17 5.22
10. Aug 31, 2017 4.14% 0.05% 7.91 0.64 -2.25
11. Sep 30, 2017 1.66% 1.93% 0.11 1.16 0.36
12. Oct 31, 2017 4.50% 2.22% 10.07 1.86 4.33
13. Nov 30, 2017 2.55% 2.81% 1.49 3.82 2.38
14. Dec 31, 2017 1.27% 0.98% 0.00 0.02 -0.01
15. Jan 31, 2018 8.95% 5.62% 58.12 22.69 36.31
16. Feb 28, 2018 -0.87% -3.89% 4.84 22.56 10.45
17. Mar 31, 2018 -2.70% -2.69% 16.25 12.55 14.28
18. Apr 30, 2018 6.07% 0.27% 22.45 0.34 -2.76
19. May 31, 2018 3.19% 2.16% 3.46 1.71 2.43
20. Jun 30, 2018 1.32% 0.48% 0.00 0.14 0.00
21. Jul 31, 2018 3.24% 3.60% 3.64 7.55 5.24
22. Aug 31, 2018 7.58% 3.03% 39.00 4.72 13.56
23. Sep 30, 2018 2.18% 0.43% 0.72 0.18 -0.36
24. Oct 31, 2018 -8.16% -6.94% 89.99 60.76 73.94
25. Nov 30, 2018 2.98% 1.79% 2.72 0.87 1.54
26. Dec 31, 2018 -6.89% -9.18% 67.66 100.65 82.52
27. Jan 31, 2019 2.33% 7.87% 0.99 49.20 6.98
28. Feb 28, 2019 9.90% 2.97% 73.35 4.49 18.14
29. Mar 31, 2019 5.45% 1.79% 16.95 0.88 3.86
30. Apr 30, 2019 5.28% 3.93% 15.56 9.47 12.14
31. May 31, 2019 -1.73% -6.58% 9.39 55.24 22.78
32. Jun 30, 2019 7.57% 6.89% 38.98 36.46 37.70
33. Jul 31, 2019 2.56% 1.31% 1.52 0.21 0.57
34. Aug 31, 2019 1.72% -1.81% 0.15 7.10 -1.05
35. Sep 30, 2019 -4.87% 1.72% 38.48 0.75 -5.36
36. Oct 31, 2019 3.98% 2.04% 7.03 1.41 3.15
37. Nov 30, 2019 3.33% 3.40% 3.98 6.50 5.09
38. Dec 31, 2019 1.84% 2.86% 0.26 4.02 1.01
39. Jan 31, 2020 5.89% -0.16% 20.80 1.03 -4.64
40. Feb 29, 2020 -8.50% -8.41% 96.63 85.85 91.08
41. Mar 31, 2020 -11.36% -12.51% 160.95 178.66 169.58
42. Apr 30, 2020 10.92% 12.68% 92.01 139.95 113.48
43. May 31, 2020 9.41% 4.53% 65.29 13.50 29.68
44. Jun 30, 2020 -1.06% 1.84% 5.72 0.97 -2.35
45. Jul 31, 2020 -1.43% 5.51% 7.65 21.67 -12.87
46. Aug 31, 2020 11.50% 7.01% 103.34 37.85 62.54
47. Sep 30, 2020 -5.67% -3.92% 49.02 22.82 33.45
48. Oct 31, 2020 -9.13% -2.77% 109.46 13.11 37.89
49. Nov 30, 2020 15.94% 10.75% 213.35 98.01 144.60
50. Dec 31, 2020 3.98% 3.71% 7.04 8.17 7.58
51. Jan 31, 2021 -11.65% -1.11% 168.48 3.87 25.55
52. Feb 28, 2021 10.07% 2.61% 76.37 3.08 15.33
53. Mar 31, 2021 -0.31% 4.24% 2.70 11.49 -5.56
54. Apr 30, 2021 10.31% 5.24% 80.63 19.25 39.40
55. May 31, 2021 -2.54% 0.55% 15.01 0.09 1.19
56. Jun 30, 2021 2.87% 2.22% 2.36 1.87 2.10
57. Jul 31, 2021 5.38% 2.27% 16.36 2.02 5.74
58. Aug 31, 2021 -6.89% 2.90% 67.54 4.18 -16.80
59. Sep 30, 2021 -2.77% -4.76% 16.83 31.49 23.02
60. Oct 31, 2021 -4.93% 6.91% 39.19 36.72 -37.94
61. Nov 30, 2021 -8.32% -0.83% 93.20 2.85 16.29
62. Dec 31, 2021 11.84% 4.36% 110.41 12.30 36.85
63. Jan 31, 2022 4.37% -5.26% 9.21 37.37 -18.55
64. Feb 28, 2022 -4.28% -3.14% 31.46 15.92 22.38
65. Mar 31, 2022 2.61% 3.58% 1.65 7.41 3.49
66. Apr 30, 2022 -3.90% -8.80% 27.32 93.13 50.44
67. May 31, 2022 -0.27% 0.01% 2.58 0.72 1.36
68. Jun 30, 2022 -7.20% -8.39% 72.81 85.50 78.90
69. Jul 31, 2022 7.73% 9.11% 40.95 68.18 52.84
70. Aug 31, 2022 -6.14% -4.24% 55.83 25.99 38.10
71. Sep 30, 2022 -10.60% -9.34% 142.31 103.92 121.61
Total (Σ): 2,687.47 1,625.64 1,480.15

Show all

VarianceV = Σ(RV,t–RV)2 ÷ (71 – 1)
= 2,687.47 ÷ (71 – 1)
= 38.39

VarianceS&P 500 = Σ(RS&P 500,t–RS&P 500)2 ÷ (71 – 1)
= 1,625.64 ÷ (71 – 1)
= 23.22

CovarianceV, S&P 500 = Σ(RV,t–RV)×(RS&P 500,t–RS&P 500) ÷ (71 – 1)
= 1,480.15 ÷ (71 – 1)
= 21.14

Systematic Risk (β) Estimation

Microsoft Excel
VarianceV 38.39
VarianceS&P 500 23.22
CovarianceV, S&P 500 21.14
Correlation coefficientV, S&P 5001 0.71
βV2 0.91
αV3 0.55%

Calculations

1 Correlation coefficientV, S&P 500
= CovarianceV, S&P 500 ÷ (Standard deviationV × Standard deviationS&P 500)
= 21.14 ÷ (6.20% × 4.82%)
= 0.71

2 βV
= CovarianceV, S&P 500 ÷ VarianceS&P 500
= 21.14 ÷ 23.22
= 0.91

3 αV
= AverageV – βV × AverageS&P 500
= 1.33% – 0.91 × 0.85%
= 0.55%

Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.86%
Expected rate of return on market portfolio2 E(RM) 13.54%
Systematic risk (β) of Visa Inc. common stock βV 0.91
 
Expected rate of return on Visa Inc. common stock3 E(RV) 12.76%

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(RV) = RF + βV [E(RM) – RF]
= 4.86% + 0.91 [13.54% – 4.86%]
= 12.76%