What is the meaning of beta?

Beta is a sign in mathematics although it is used as a series of terms that is used in chemical compounds and it can be utilized by the help of making the things more appropriate and more reliable. It is actually the opposite of Alpha male and it does different then alpha does in the functioning. Beta is actually considered towards the weak terms and it is going to make the after workings in a different and predominant way that it will not be able to manage the workings in a different way a number of things are there that are able to make up the things to be more reliable and more demanding.

1.      What type of beta have you found in Part 1-asset beta, equity beta or debt beta?  Explain.

Beta is of different parts such as asset beta, equity beta and debt beta.

In Part-1 we have found the equity beta. For Brambles Limited the equity beta is calculated. The asset beta and debt beta in our analysis also relates. The equity beta is defined as; in the selected period of time the volatility of the stock price is measured. For investment a greater risk is represented by the volatility higher level therefore, in understanding the price of stock beta is measured by the investors. The price of stock Vitality is calculated in the project 1^st part. By the statistical measure use “regression analysis” for risk beta measuring the price of the stock are taken. That’s the reason beyond saying that equity beta is found in the part 1. The asset beta or known as unlevered beta is defined as: without any impact of debt the risk of the company is measured. In simple words, in the risk profile how much company’s equity did to contribute.

Unlevered beta (asset beta) = Levered beta (equity beta) / (1+Equity (1−tax rate) ∗Debt / Equity​) (corporatefinanceinstitute, 2017)

For measuring the security volatility as compare to whole market investors use the word Beta for calculations. The risk which is inherit in market or in the segments of market which is enclosed in a term as systematic risk.

2.      Explain briefly the meaning of the financial ratios you are studying in this assignment.

Debit towards equity ratio analysis are use of the financial ratios. The earned ratio of time interest, value of book ratio to value of market and ratio of earnings to price and debt to equity ratio. Below the meanings of this ratio of finance are discussed:

Debit to ratio of equity:

Debt verses equity are financed by the operation of business levels for representing this it is measured by the debit ratio of equity.

The earned ratio of time interest:

While current incomes are using the information is provided by the company’s capability to meets its obligation of debt.

Ratio of earning to price:

 The earning of investors of the common stakeholders in the company asset on each dollar spend by them.

Value of book ratio to market:

This is also known as book ratio. The difference between the value which is calculated by the market against the worth or value calculated by company is the representation of ratio (Lima, 2017).

4.  Explain the meaning of R-Square of the regression.  Refer to the Excel example in Moodle.

On the second variable impact of a variable evaluate the use of managers and business administrations which is commonly said as statically measures. Representing the difference and variance between the two variables which is mainly statistical measure of the regression analysis. Between the selected variables the level of closeness is shown by the regression of R square. Although, the closeness of values of beta measured and calculate the ratio. According to the researchers, the value is considered to be acceptable of R square if more than 50%. Similarly, the competition in the highly competitive markets as wrong decision is not afforded by the companies as 30% value of regression is important in the analysis of business (Minitab, 2013).    

5.      From each of the regressions in step 8 and 10, comment on the R-Square and the p value for the slope.

For representing the analysis of slope the two indicators are used as p-value and R-square. In the part 1 for Brambles Limited, in the R square and p-value the regression analysis results are showed in the below table. The values of comments are also discussed in detail in the below table:

Comments in detail:

On the basis of above table which is presenting the value of R square and p-value Beta vs P / E in the last row or 4rth row, as the value of p-value is greater than the value of alpha value which we can easily say that this relationship test is significant. Although, it is cleared that the changes bring over the period of time in the price values to ratio of earning by changes occurs in beta value. On the other, while, on 3^rd row which is beta vs D/E, this is also significant between the values of beta and equity to debt. The beta vs D/E value of R-square is greater than the values of p-value. That why the 3^rd row and the 4rth row in test are significant and commented as Significant.

As between the two selected variables a strong relationship significantly regressive is exists we can say it as in our conclusion. In second row, for beta vs TIE the value of R square and p-value is represented. The value of alpha is greater than the value of p-value in the 1^st and 2^nd row. The results of 1^st row and 2^nd row are insignificant because the p-value is greater than the alpha value. According the part 1 results which are used in this table.

(7). For Brambles Limited the price of beta and ratio of earnings are correlated by observing the graph. By the results of observations, the reason of saying correlate is both the variable at a same time increase or decrease. While, it is showing in the graph, over a selected time there is a huge difference in beta and in ratio of earned interest. This ratio is between 40 to 50. For Brambles Limited the graph line is stick to bottom area for always. According to the results of the observations, during ten year of duration, then beta values are the trend of debt to equity is negative or opposite to it. The values in between 0.5 to 2.5 of both values. Due to similar values, in line chart the trend is clear. The overall trend increasing is not represent by debt to equity. From overall period of selection, the ratio of debt to equity is stabled only in 2013 to 2016. This all showed in the line chart of the graph.  

References of What is the meaning of beta

corporatefinanceinstitute. (2017, 05 02). Unlevered Beta / Asset Beta. Retrieved from CFI: https://corporatefinanceinstitute.com/resources/knowledge/valuation/unlevered-beta-asset-beta/

Lima, R. (2017). What is the relationship between R-squared and p-value in a regression? Springer, 10.

Minitab. (2013, March 03). Regression Analysis: How Do I Interpret R-squared and Assess the Goodness-of-Fit? Retrieved from The Minitab Blog: https://blog.minitab.com/blog/adventures-in-statistics-2/regression-analysis-how-do-i-interpret-r-squared-and-assess-the-goodness-of-fit