Chat with Sai Harish on 24th March 2009
Being posted unedited with his consent...
8:35 PM me: anna, how to find WACC
| 6 minutes |
8:42 PM Sai: narendra..
edaina sare..
| 17 minutes |
9:00 PM me: edaina sare ante?
arrive at a figure somehow?
| 32 minutes |
9:33 PM me: there?
| 16 minutes |
9:49 PM Sai: edaina sare ante
9:50 PM e doubt aina contact narendra
me: he is not online...
i figured out something
listen
what r u doing in the CAPM analysis?
9:51 PM Sai: I will try to find out Beta for India cements
and compare it with betas of those competing companies
me: but beta values are available na
how will u find?
Sai: where?
me: capitaline
Sai: capitaline lo Beta undaa
me: yes
Sai: Jayant said, it has to be calculated
9:52 PM me: it is there...
Sai: by fittin regression line over the last 24 months
oh cool..
capitaline lo india cements ledu kada
me: don't know... i saw it for ACC
9:53 PM Sai: is it..
me: may be u can find out using regression or whatever and then compare with values from capitaline
Sai: ok
me: 0.6575
that's for ACC
Sai: I will also consult jayant..
:)
full fast kada
me: hehe
9:54 PM but WACC includes CAPM thing
i am doing WACC...
ok do one thing, i will use the beta that comes from your analysis
is that fine?
Sai: okay
9:55 PM till then... if you are using excel
put some dummy values
me: yes
Sai: and proceed..
or else your time will be lost
me: i am using some values for corporate tax rate and risk-free rate
9:56 PM Sai: okay..
is that not available in income tax website?
risk free rate ante govt. bonds coupon value ee kada
me: wow, good idea
will see
what's the URL?
Sai: :(
| 5 minutes |
10:02 PM me: :)
will see
Sai: okay
| 30 minutes |
10:33 PM Sai: Shree cements is out of our list
right
?
me: no confirmation from narendra
let's consider it out, we have too many companies
10:34 PM am using data from capitaline, as far as possible
Sai: okay
| 14 minutes |
10:48 PM Sai: where is beta given in capitaline
under which section?
10:49 PM me: Share Price
there is a link called beta Analysis
Sai: yes got it
thank you
me: can i assume this is unlevered?
welcome
10:50 PM and lever it first and then apply barra equation and do the adjustment?
10:51 PM Sai: bouncer!
NSE ke chestunnam kada
manam
me: NSE?
10:52 PM never thought that... ACC beta value is given for BSE
Sai: I mean Beta and stuff related to NSE nifty
there is option to select NSE
I will take thosee and send them across
all betas..
10:54 PM me: ok fine...
| 8 minutes |
11:02 PM me: Ambuja Cements India Ltd
Ambuja Cements Ltd
Ambuja Cements Ltd
there are two
i am taking the latter
11:03 PM Sai: okay
me: okati cheppu raa
Sai: gujarat ambuja kaada
me: expected market return elaa telustundi?
Sai: !!
so many bouncers in a single day!!
manaki FM lo intha undaa
11:04 PM me: gujrat ambuja, i guess is the same... Ambuja Cements is the official name right now... let's use this only
Sai: okay
me: yess man, this WACC when i first saw i got totally blank... it seems too simple to be correct...
11:05 PM plus am not taking into account whether there r preferred shareholders... already too much haziness due to cost of equity, cost of debt, equity beta, debt beta bla bla bla... so assuming all equity as one...
is that ok?
11:06 PM Sai: cheseyyi..
where from did you get cost of debt?
11:07 PM me: there is another way... find a beta-asset, which is a weighted average of debt beta and equity beta
this beta-assed can be directly used like in the SML equation to find WACC...
in this approach debt-beta has to be assumed
11:08 PM bhaskar said i can assume it 0.3
0.2, sorry
Sai: oho
| 6 minutes |
11:15 PM me: bhaskar disconnected :))
ate his head a lot
Sai: :D
ha ha haa!!!!
me: another discovery
7.5%
that is the avg market premium in india
11:16 PM Sai: oh cooooll..
source of data?
me: bhaskar
Sai: ante how to mention in the report?
me: so the CAPM eqn becomes Rf + beta * 7.5%
Sai: good..
chala thanks
inka rechipotaa
me: :)))
wow, mere sher
naa puli
:P
11:17 PM Sai: do you maintain notes in Mat Man?
inka better.. puli raja analedu
11:18 PM me: no yaar, i wrote 1-2 classes, then got fed up
11:19 PM how come debashis asking the same question?
no. of quity shares
Sai: everybody in class is planning to bank on your notes
me: the data was there somewhere
Sai: ee time lo heart breaking news cheppav kada
me: :))
the guy is giving slides na
11:20 PM Sai: ya...
me: i wrote 3 lectures
something
11:21 PM copied slides ;-)
Sai: :)
me: am trying to find where number of shares r given
it was there somewhere
go to shareholding pattern
under equity
that has all the numbers
11:22 PM Sai: oh okay...
will it be of use to me?
:D :D
me: now don't copy to debashis
like u copied his message to me
:))
and he copied it to me too
same wordings
Sai: coincidence!!
me: i sent him the reply
wow
11:23 PM Sai: debashis is not in my list
me: amazing
!
| 13 minutes |
11:36 PM Sai: sent you an email
11:37 PM check if that report is of any use for your analysis
me: hey, i can't open docx
can u resend as doc?
Sai: okay
11:39 PM re sent
| 10 minutes |
11:49 PM me: thanks
am using beta assuming it is levered
when we have the values from your part, we will put the levered values into ine
mine
11:50 PM Sai: okay
is the value from capitaline levered Beta
?
me: i feel so
Sai: I will find unlevered Beta..
11:51 PM from it then..
me: it shud show the actual correlation right
Sai: yes
any idea of corporate tax?
me: bhaskar said 38.5%
Sai: oh..
| 11 minutes |
12:03 AM me: yaar am not getting this treasury rate anywhere
this saraswat bank link says it is 9.23 %
high value
am taking it as 9%
low value is 8.67%
this guy says
I have used a 7.5% risk free rate going
12:06 AM me: oh
so i will also use the same
12:07 AM Sai: kpmg tax rate survey 2008
12:08 AM India (2008 rate = 33.99%/
me: ohhh
what about our CA
Sai: emo
was looking around for sources..
that can be mentioned in references..
came across this
12:09 AM me: ok
using 33.99 then
Sai: okay
me: preserve the link
Sai: sure
12:11 AM me: beta values i have to use capitaline ones only na?
12:13 AM Sai: yaa..
i am using them ..
12:14 AM me: sent my excel
take a look once, i will write some crap on it
Sai: cool!
12:19 AM I was about to do an exactly similar analysis
You globe about WACC
I will globe about asset betas
and CAPM model
Thanks for the sheet..!!!
naa work taggindi
12:20 AM one small doubt
did Vinay kumar tell that debt Beta is zero in the class?
as it is not risky
?
12:21 AM me: i don't remember
Sai: okay
debt beta = 0.2 ki any logic?
me: brealy mayers mein it has been taken 0.1 and 0.2 in 2 places
Sai: oho
me: so this is realistic value
Sai: coll
okay
12:22 AM keep up the good work!!
12:23 AM me: hahaa, sure...
| 8 minutes |
12:31 AM Sai: arey
how did you find out asset beta
12:32 AM in what way is asset beta different from unlevered beta?
12:37 AM u there?
| 6 minutes |
12:43 AM me: yes
Sai: ee pdf lo...
12:44 AM oka diff formula
12:45 AM undi
I am getting some thing else..
me: asset beta is different... if u use asset beta wala formula, then u don't need to use the weighted avg of returns wala fomula
12:46 AM Sai: what is asset beta formula
me: weighted avg of debt and equity beta
Sai: oho..
anthenaa..
me: check the doc i sent
12:47 AM Sai: I was under the assumption that asset beta = unlevered beta
12:48 AM me: no no
unlevered is different
12:50 AM Sai: 7 page..
he gave the same formula
12:51 AM me: the doc u sent spinned my head
i closed it
:))
Sai: 7 page in your doc
me: hmm, it looks fine to me...
12:52 AM Sai: where is your Beta unlevered
formula in the same doc
12:53 AM me: did not find that
i assumed beta given is the levered beta
Sai: okay
unlevered nuvvu calculate cheyyaledaa
12:54 AM me: cheyle
Sai: okay
me: what shud i do?
go ahead with it?
Sai: yes yes..
12:55 AM me: :)
12:58 AM Sai: I got some thing else with that formula
12:59 AM me: hmm
Sai: Asset β
0.55244898
0.619724771
0.413505747
0.771509434
0.55244898
0.619724771
0.413505747
0.771509434
1:00 AM sorry
man needi correct
pukka
now I am eating your brain
me: how?
:))
Sai: :D
| 32 minutes |
1:32 AM me: now what to comment
1:34 AM Sai: globe it
based on text book theory
1:35 AM I don't think we need to make a huge report
me: ok, will make it 2 pages... aur nahi ho raha
Sai: bas
:))) God!
ReplyDeleteMakes me remember our own conversations that had no sense of direction sometimes! :D
Hmm, but I thought this one had some direction... Afterall we ended up finishing the assignment!
DeleteWelcome to my blog, Sindhu. And thanks a lot for commenting.