Introduction — Definition of Beta. is also denoted as the Beta Coefficient and is identified as the slope of the linear regression of the portfolio in which within a specific period or point served as benchmark. ADDIN EN .CITE 1143Risk ManagementMay 22 2007http /www .trade trek .com /Education /risk_management .asp Risk Management ) Beta is the assessment of the market risk or `volatility ‘ of the stock. With this. it may help investors to make the right decisions when investing stocks because of some fluctuations in price of the stocks

. ADDIN EN .CITE July 29 Beta Gauging Price FluctuationsJuly 29 2005May 23 2007http /www .inves topedia .com /articles /01 /102401 .asp Beta. Gauging Price Fluctuations July 29. 2005

Volatility which is the measure of the uncertainty or risks accompanied in investing due to fluctuation of the prices is determined its relativity by approximating its Beta. Volatility is associated with security ‘s value which means that when the investment is said to having a higher volatility. there is a bigger potential of security ‘s value for expansion over a larger range. Thus implying that within a shorter period of time. price of the security can vary significantly. On the contrary. a lower volatility insinuates that the fluctuation in security ‘s value is unnoticeable however there are small alterations of the value within a stable range of time. ADDIN EN .CITE 4443Volati lityMay 23 2007http /www .answe rs .com /volatility Volatility

With that. Beta being the measurement of volatility. it offers meaningful significance to the market risk compared to the greater market. Furthermore. Beta is used for comparison along with the other stock. estimating the overall volatility of the return of the security in contradiction of the return in the market

In investment and finance. Beta is the connection or the coefficient of a portfolio or an individual stock in contrast to the market all together. So as to compute for the beta. the regression analysis is used. The Beta of an asset is calculated using the formula where in

ra is the gauge of yield profit of the asset and

rp is the evaluation of the rate of the yield profit of the portfolio of which the asset is a component. ADDIN EN .CITE 2243Beta CoefficientMay 23 2007http /www .answe rs .com /Beta Beta Coefficient

Furthermore. the cost equity of a company can be projected using the Capital Asset Pricing Model in which the operation of equity beta of the company and again. equity beta is the operation of both the weight and asset risk. This is calculated using the formula where in

KE is the cost of equity of the company

RF is the rate of return on a risk free investment also known as the risk-free rate

RM is the market portfolio

and the formula of a Firm Value (V ) Firm Value (V Debt Value (D Equity Value (E ) ADDIN EN .CITE 2243Beta CoefficientMay 23 2007http /www .answe rs .com /Beta Beta Coefficient

Applying this entire concept in chosen.