Conclusion on Risk Beta and Rate of Return within the CAPM and DGM

        In conclusion it can be said that the company, Samsung, is a technological giant, but there are implied elements which indicate that the stock of the company should not be purchased. It is also seen that the potential of the stock is that it would drop in prices so it is advisable to sell the stock as this could be very profitable. The growth rate is paid on dividends and it can be seen that the dividends are given for the five years, then the growth rate in determined, in essence the average rate is computed, after the computation, the dividend is computed, as per its recommendation, the dividend is then forecasted, this forecasted into the future, on discounting the dividends from the future the worth of the company or the intrinsic value of its stock is given.

        Beta in its true self is the level of reaction that the company faces when it deals with the market index, it is considered to be moving with the market index, if it is 1, this indicates that if there is a 1% change in market index, or the market as a whole the beta would change accordingly. The beta denotes this, if it is 0.91 it denotes that if the market changes by 1%, there is a 0.91% change in the stock price of the company. Similarly, if the beta is 1.1, it can be said that per percent change in the market index, there is 1.1% change in the stock price in similar direction.

        It can be seen that the companies discussed above are the biggest companies that are competing Samsung in the given industry. It is also seen that there are companies having a very high beta, like Sony, and Apple, and some having a very low beta, like Nokia. In fact, Nokia has a negative beta that is close to zero, indicating that it has almost no impact of the market. It can be seen that the growth in dividends is more than the growth in earnings, this is both beneficial and dangerous as it seems that the company is expanding its dividends without increasing its earnings respectively. In calculating intrinsic value, it seems that the company is calculating its value in terms of the local currency, after the intrinsic value is calculated it is compared to the market value and the decision resides with the value that is acquired at the end.