Sheet1

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.56931242
R Square 0.32411663
Adjusted R Sq 0.31225903
Standard Erro 0.05089559
Observations 59

ANOVA
df SS MS F Significance F
Regression 1 0.07080513 0.07080513 27.3340773 2.53438E-06
Residual 57 0.14765057 0.00259036
Total 58 0.2184557

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept -8.9302E-05 0.00719056 -0.01241929 0.99013446 -0.01448815 0.01430955
X Variable 1 1.39868365 0.2675268 5.2282002 2.53438E-06 0.86297025 1.93439705

Page 1
 Sheet1

Lower 95.0% Upper 95.0%

-0.01448815 0.01430955
0.86297025 1.93439705

Page 2
 Regression Chart

Figure 4.3: Disney versus S&P 500: 1999 ­ 2003

30.00%

20.00%
Regression line

10.00%
Disney

0.00%
­15.00% ­10.00% ­5.00% 0.00% 5.00% 10.00% 15.00%

­10.00%

­20.00%

­30.00%
S&P 500

Page 3
 Regression Output

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.56931242
R Square 0.32411663
Adjusted R Sq 0.31225903 Disney versus S & P 500: Ja
Standard Erro 0.05089559
Observations 59
0.3
ANOVA
df SS MS F Significance F
Regression 1 0.07080513 0.07080513 27.3340773 2.53438E-06
Residual 57 0.14765057 0.00259036
Total 58 0.2184557 0.2

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%

Intercept -8.9302E-05 0.00719056 -0.01241929 0.99013446 -0.01448815 0.01430955
X Variable 1 1.39868365 0.2675268 5.2282002 2.53438E-06 0.86297025 1.93439705
0.1
Disney

RESIDUAL OUTPUT

Observation Predicted Y Residuals 0

1 0.01619326 0.108514 -15.00% -10.00% -5.00% 0.00%
2 -0.03295186 0.0186364
3 0.0385623 -0.07546486
4 0.0047982 0.03858456
5 -0.02627317 -0.02306893 -0.1
6 0.05336295 -0.05536987
7 -0.03059754 -0.01106913
8 0.01119659 0.03952804
9 0.00103593 0.08661924
10 0.04549435 0.02574375 -0.2
11 0.01201074 0.00742976
12 0.00858516 0.05368228
13 0.01712723 -0.04452449
14 0.02497805 -0.02216115
15 -0.03708856 -0.04577661 -0.3
S & P 500
16 0.03538291 0.04437169
17 -0.00140773 -0.07245591
18 -0.00872914 -0.06949172
19 0.05096847 -0.0043018
20 -0.01539947 -0.02281709
21 0.02548809 0.11524039
22 -0.01515656 -0.05751786
23 0.01199072 0.0569748
24 0.04456103 0.06540964
25 -0.03994787 0.05582089
26 -0.06500711 -0.05999289

Page 4
 Regression Output

27 0.01455799 -0.00086752
28 0.02082213 -0.0002339
29 -0.03946773 -0.00087809
30 0.04236777 -0.02254795
31 0.05529131 -0.08183999
32 -0.03857087 -0.02203519
33 0.02758636 -0.00629604
34 -0.05300956 0.15427538
35 0.01599409 0.04147717
36 0.03261711 0.07499159
37 0.05204682 -0.00290677
38 0.03715474 -0.03481282
39 0.03808989 -0.00136092
40 0.05362805 -0.05137072
41 0.02745105 -0.02745105
42 0.04354108 0.01438685
43 0.0015559 -0.04206763
44 0.05480139 -0.03480139
45 -0.00786879 0.01815201
46 0.05918247 -0.02030558
47 0.02302239 -0.04381241
48 0.04488175 0.04794203
49 0.01103219 0.00842306
50 0.01007509 -0.03488425
51 0.01810056 -0.04604577
52 0.0340916 -0.05425289
53 0.00127809 0.03370134
54 -0.06392102 -0.04963763
55 0.02707848 -0.00235938
56 0.07522285 0.03442627
57 0.03566918 0.00757192
58 0.10145023 0.0199919
59 -0.02872279 -0.02711477

Page 5
 Regression Output

ersus S & P 500: January 1992 - 1996

0.3

0.2

Lower 95.0% Upper 95.0%

-0.01448815 0.01430955
0.86297025 1.93439705
0.1

0
% 0.00% 5.00% 10.00% 15.00%

-0.1

-0.2

-0.3
S & P 500

Page 6
Return on Disney (including dividends)

Figure 3.4: Returns on Disney: 1999­ 2003
30.00%

20.00%

10.00%

0.00%

­10.00%

­20.00%

­30.00%
Feb­99

Jun­99

Oct­99

Feb­00

Jun­00

Oct­00

Feb­01

Jun­01

Oct­01

Feb­02

Jun­02

Oct­02

Feb­03

Jun­03

Oct­03
Month
 RISK RETURN 10

Current riskfree rate = 4.00% Risk premium for stocks= 4.82%

Number of periods of data= 60 Riskfree rate during period = 3.82%
 RISK RETURN 11

Month Time period Index Price(Stock) DPS(Stock) Split Factor Index Level Dividends on market

Jan-99 1 1 $33.00  1 1279.64 0.974
Feb-99 2 1 $35.19  1 1238.33 1.561
Mar-99 3 1 $31.13  1 1286.37 1.491
Apr-99 4 1 $31.75  1 1335.18 1.005
May-99 5 1 $29.13  1 1301.84 1.855
Jun-99 6 1 $30.81  1 1372.71 1.321
Jul-99 7 1 $27.56  1 1328.72 1.169
Aug-99 8 1 $27.75  1 1320.41 1.735
Sep-99 9 1 $26.00  1 1282.71 1.544
Oct-99 10 1 $26.50  1 1362.93 0.918
Nov-99 11 1 $27.88  1 1388.91 1.725
Dec-99 12 1 $29.25  0.21 1 1469.25 1.411
Jan-00 13 1 $36.31  1 1394.46 0.980
Feb-00 14 1 $34.00  1 1366.42 1.669
Mar-00 15 1 $41.25  1 1498.58 1.431
Apr-00 16 1 $43.63  1 1452.43 1.081
May-00 17 1 $42.19  1 1420.60 2.014
Jun-00 18 1 $38.81  1 1454.60 1.027
Jul-00 19 1 $38.56  1 1430.83 1.047
Aug-00 20 1 $38.96  1 1517.68 1.974
Sep-00 21 1 $38.25  1 1436.51 1.064
Oct-00 22 1 $35.81  1 1429.40 1.018
Nov-00 23 1 $28.94  1 1314.95 1.839
Dec-00 24 1 $28.94  0.21 1 1320.28 1.120
Jan-01 25 1 $30.45  1 1366.01 1.084
Feb-01 26 1 $30.95  1 1239.94 1.593
Mar-01 27 1 $28.60  1 1160.33 1.102
Apr-01 28 1 $30.25  1 1249.46 0.967
May-01 29 1 $31.62  1 1255.82 2.024
 RISK RETURN 12

Jun-01 30 1 $28.89  1 1224.42 0.845

Jul-01 31 1 $26.35  1 1211.23 1.130
Aug-01 32 1 $25.43  1 1133.58 1.903
Sep-01 33 1 $18.62  1 1040.94 1.108
Oct-01 34 1 $18.59  1 1059.78 1.020
Nov-01 35 1 $20.47  1 1139.45 1.604
Dec-01 36 1 $20.72  0.21 1 1148.08 1.359
Jan-02 37 1 $21.06  1 1130.20 1.135
Feb-02 38 1 $23.00  1 1106.73 1.670
Mar-02 39 1 $23.08  1 1147.39 0.968
Apr-02 40 1 $23.18  1 1076.92 0.937
May-02 41 1 $22.91  1 1067.14 1.874
Jun-02 42 1 $18.90  1 989.92 1.335
Jul-02 43 1 $17.73  1 911.62 1.065
Aug-02 44 1 $15.68  1 916.07 1.518
Sep-02 45 1 $15.14  1 815.28 1.321
Oct-02 46 1 $16.70  1 885.76 1.210
Nov-02 47 1 $19.82  1 936.31 1.534
Dec-02 48 1 $16.31  0.21 1 879.82 1.512
Jan-03 49 1 $17.50  1 855.70 1.116
Feb-03 50 1 $17.06  1 841.15 1.692
Mar-03 51 1 $17.02  1 848.18 1.114
Apr-03 52 1 $18.66  1 916.92 1.092
May-03 53 1 $19.65  1 963.59 1.594
Jun-03 54 1 $19.75  1 974.30 1.400
Jul-03 55 1 $21.92  1 990.31 1.380
Aug-03 56 1 $20.50  1 1008.01 1.575
Sep-03 57 1 $20.17  1 995.97 1.367
Oct-03 58 1 $22.64  1 1050.71 1.573
Nov-03 59 1 $23.09  1 1058.20 1.744
 RISK RETURN 13

Dec-03 60 1 $23.33  0.21 1 1111.92 1.738

 RISK RETURN 14

REGRESSION STATISTICS AND RISK PARAMETERS
RISK AND PERFORMANCE MEASURES
Intercept (Alpha) = 0.0467%
Slope (Beta)= 1.014612369
Rf(1­ Beta) = ­0.0046% Annualized
Intercept­Rf(1­Beta)= 0.0512% 0.006165483

VARIANCE STATISTICS
Variance of the stock= 0.008696237 0.09325361 0.10435484
Variance of the market = 0.002458402 0.323039997
Systematic variance= 0.002530773
Unsystematic variance= 0.006165464
R squared = 29.10%

USING BETA
In estimating expected returns:
  Riskfree Rate = 4.00%
  Historical return premium= 4.82%
  Expected return= 8.89%
  
In forecasting prices:
  Current price= $28.00 
  Annualized DPS= $0.21 
  Predicted prices:
 RISK RETURN 15

  ­ One year from now $30.28 
  ­ Two years from now $32.74 
  ­ Three years from now $35.41 
  ­ Four years from now $38.29 
  ­ Five years from now $41.41 
 RISK RETURN 16

Current stock price= $28.00 
Current Annual DPS $0.21 
 RISK RETURN 17

Return(Stock) Return(Mkt) (R(jt)­Rj)^2 (R(mt)­R(m))^ (R(jt)­R(j))

Disney S&P 500 (R(mt)­R(m))
6.63% ­3.23% 0.004491293 0.000968381 ­0.00208549
­11.55% 3.88% 0.013167889 0.001596632 ­0.00458522
2.01% 3.79% 0.000432407 0.001529411 0.000813221
­8.27% ­2.50% 0.006717948 0.00056676 0.001951272
5.80% 5.44% 0.003442305 0.003091586 0.003262236
­10.55% ­3.20% 0.010974843 0.000953723 0.003235268
0.68% ­0.63% 5.62281E­05 2.59126E­05 ­3.8171E­05
­6.31% ­2.86% 0.003887396 0.000750105 0.001707616
1.92% 6.25% 0.000397797 0.004058093 0.00127055
5.19% 1.91% 0.002766852 0.000409074 0.001063883
5.69% 5.78% 0.003314888 0.003481899 0.003397368
24.15% ­5.09% 0.05865317 0.00247405 ­0.0120462
­6.37% ­2.01% 0.003966747 0.000358892 0.001193161
21.32% 9.67% 0.045774334 0.009581198 0.020942133
5.76% ­3.08% 0.003397705 0.000878063 ­0.00172725
­3.29% ­2.19% 0.001038499 0.000430616 0.000668726
­8.00% 2.39% 0.006286107 0.000629872 ­0.00198983
­0.64% ­1.63% 3.27992E­05 0.000230358 8.69228E­05
1.02% 6.07% 0.00011949 0.003826998 0.000676229
­1.81% ­5.35% 0.000303949 0.002737304 0.000912141
­6.37% ­0.49% 0.003968791 1.43323E­05 0.000238499
­19.20% ­8.01% 0.036578596 0.006225977 0.015090975
0.73% 0.41% 6.35364E­05 0.000027218 4.15852E­05
5.22% 3.46% 0.002805155 0.001281661 0.001896116
1.64% ­9.23% 0.000293589 0.008304128 ­0.00156141
­7.59% ­6.42% 0.005657272 0.00397417 0.00474162
5.77% 7.68% 0.003411306 0.006080577 0.004554416
4.53% 0.51% 0.002116307 3.91112E­05 0.0002877
 RISK RETURN 18

­8.63% ­2.50% 0.007331415 0.00056834 0.002041259

­8.79% ­1.08% 0.00760482 9.23281E­05 0.000837937
­3.49% ­6.41% 0.001169676 0.003962034 0.002152742
­26.78% ­8.17% 0.071331654 0.006489864 0.021515872
­0.16% 1.81% 8.04773E­07 0.000371053 ­1.728E­05
10.11% 7.52% 0.010372143 0.005827746 0.007774717
2.25% 0.76% 0.00053759 7.63444E­05 0.000202588
1.64% ­1.56% 0.000293209 0.000207652 ­0.00024675
9.21% ­2.08% 0.00861775 0.00038426 ­0.00181974
0.35% 3.67% 1.75757E­05 0.001436604 0.0001589
0.43% ­6.14% 2.54705E­05 0.003630539 ­0.00030409
­1.16% ­0.91% 0.00011955 6.26909E­05 8.65719E­05
­17.50% ­7.24% 0.030386994 0.005069147 0.01241113
­6.19% ­7.91% 0.0037443 0.006073646 0.00476881
­11.56% 0.49% 0.013204115 3.65434E­05 ­0.00069464
­3.44% ­11.00% 0.001137355 0.01185064 0.003671292
10.30% 8.64% 0.010764558 0.007675955 0.009090009
18.68% 5.71% 0.035171412 0.003391121 0.010921104
­16.65% ­6.03% 0.02748447 0.003500957 0.009809278
7.30% ­2.74% 0.005428072 0.000689115 ­0.00193405
­2.51% ­1.70% 0.000596765 0.000250903 0.00038695
­0.23% 0.84% 2.65881E­06 9.06552E­05 ­1.5525E­05
9.64% 8.10% 0.009422838 0.006758125 0.00798002
5.31% 5.09% 0.002891078 0.002710489 0.002799327
0.51% 1.11% 3.36764E­05 0.000150759 7.12531E­05
10.99% 1.64% 0.012229594 0.00030962 0.001945898
­6.48% 1.79% 0.004104573 0.000362403 ­0.00121964
­1.61% ­1.19% 0.000236652 0.000116222 0.000165844
12.25% 5.50% 0.015171631 0.003150037 0.006913118
1.99% 0.71% 0.000423965 6.87608E­05 0.00017074
 RISK RETURN 19

1.95% 5.08% 0.000408163 0.002696636 0.001049126

 RISK RETURN 20

­0.0007140791