Task
Interserve plc
Company Financial Analysis (1,750 words)
Compare the calculated beta for Interserve plc against that for the published beta on The Financial Times website. Furthermore, differences will be explained regarding the betas and comparisons will be made from the share price performance of the company and of the FTSE 250 index.
FTSE 250 index to undertake this task. Collect the weekly share price data for both your company and the FTSE 250 index from 1st February 2013 until 31st January 2016 from Yahoo Finance (uk.finance.yahoo.com) and undertake the following tasks:
(i) Using the data collected, calculate the beta for your company using Excel. Compare your results with the published beta for your company on Reuters or Morningstar. Explain any differences between the published result and your calculated result. Your explanation should consider academic theories and/or market and sector factors.
(ii) Compare the share price performance of your company with that of the FTSE 250 index. In your comparison, you should analyse your company's performance and provide both academic and practical justifications for your arguments.
(iii) Compare the long-term performance of your company with the short-term share price performance since the 31st January 2016 (i.e. 1st February 2016 - 1st April 2016). You should identify the principal factors that have caused price changes over this three-month period and support your explanations with academic theory.