Authors : Chuke Nwude and Sergius Nwannebuike Udeh
Abstract: This study addresses a very important topic in corporate finance that is not well treated in many developing stock markets with particular reference to Nigeria. Beta is a major component of the capital Asset Pricing Model (CAPM) used in the determination of the required rate of return on equity but a very high percentage of the documented works done in this area have been carried out mostly in developed economies cum stock markets of America, Europe and Asia. However since we have need for stock market, there is also need to estimate equity betas which will be used to determine the required rate of return on equities traded in our markets in order to guide investors in making investment decisions. Therefore we calculated the (historical) betas of the listed stocks in the Agricultural/Agro-allied sector of the Nigerian Stock Exchange from 2000-2012, a thirteen year period. From the estimation of beta for the listed stocks, it was discovered that the beta content of the entire sector ranges between 7.66 and 2.57% which provided an average beta content of 3.09% for the sector and an average alpha risk content of 82.05%.
Chuke Nwude and Sergius Nwannebuike Udeh, 2016. Beta of Equities Listed in the Agricultural/agro-Allied Sector of the Nigerian Stock Exchange. International Business Management, 10: 4626-4634.