Editing Arctic Shores
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|Assessment scheme approach | |Assessment scheme approach | ||
| | |7.0 | ||
| | |5.0 | ||
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|Beta | |Beta | ||
| | |5.0 | ||
|Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. | |Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more accurately predicts a future beta. | ||
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|Cost of equity (%) | |Cost of equity (%) | ||
| | |40.771% | ||
|Cost of equity = Risk-free rate + Beta x Equity risk premium. | |Cost of equity = Risk-free rate + Beta x Equity risk premium. | ||
|} | |} | ||
===Assessment scheme to adjust the basic beta coefficient of Arctic Shores=== | ===Assessment scheme to adjust the basic beta coefficient of Arctic Shores=== | ||
{| class="wikitable" | {| class="wikitable" | ||
|+Assessment scheme to adjust the basic beta coefficient of Arctic Shores<ref>https://ijb.cyut.edu.tw/var/file/10/1010/img/859/V183-3.pdf</ref> | |+Assessment scheme to adjust the basic beta coefficient of Arctic Shores<ref>https://ijb.cyut.edu.tw/var/file/10/1010/img/859/V183-3.pdf</ref> | ||
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|Good reputation | |Good reputation | ||
|Very good reputation | |Very good reputation | ||
|'''+0 | |'''+1.0''' | ||
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!Patent protection | !Patent protection | ||
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|Business plan frequently proven | |Business plan frequently proven | ||
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'''0. | '''+0.5''' | ||
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!Technical development plan | !Technical development plan | ||
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|Technical development plan very likely to be feasible | |Technical development plan very likely to be feasible | ||
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'''0. | '''+0.5''' | ||
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!Marketing plan | !Marketing plan | ||
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|Marketing plan very likely to be feasible | |Marketing plan very likely to be feasible | ||
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'''0. | '''+0.5''' | ||
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!Business development plan | !Business development plan | ||
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|Business development plan very likely to be feasible | |Business development plan very likely to be feasible | ||
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'''0. | '''+0.5''' | ||
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! rowspan="4" | | ! rowspan="4" | | ||
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|Sales plan very conservative | |Sales plan very conservative | ||
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'''0. | '''+0.5''' | ||
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!Costs plan | !Costs plan | ||
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|Costs plan very conservative | |Costs plan very conservative | ||
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'''0. | '''+0.5''' | ||
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!Profitability | !Profitability | ||
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| colspan="7" |'''Total''' | | colspan="7" |'''Total''' | ||
|''' | |'''7.0''' | ||
|} | |} | ||
== References and notes == | == References and notes == | ||
<references /> | <references /> |