Study For βCoefficient Estimates And Application Of Highway Industry In China

The βcoefficient as a indicator to measure the risk of the assets of the system, is usedmore frequently in foreign mature securities market than in China’s securities market wherethe use of βcoefficient is still in its infancy. The SSE180, SSE380, CSI300and CSI500’shigh β and low β indexes are released officially by the Shanghai Stock Exchange and ChinaSecurities Index Co., Ltd on August6,2012. That β βcoefficient can be used as a separateindicator to measure the Shanghai stock market beta attribute changes in stock prices, whichprovides a new underlying index to index-based investment. What is more, in the evaluationpractice, β βcoefficient can be used to determine the discount rate of specific assets andimprove the defect of too subjectivity in deciding discount rate in the past.This shows that the research of βcoefficient valuation and the application is of greatimportance. This thesis values the βcoefficient estimation of highway listed companies andthe industry every quarter in2010and2012based on the βcoefficient’s basic theoreticalanalysis and valuation methods, and analyzes comparatively the results of these βcoefficientestimations, and summarizes the highway listed company’s market risk characteristics, itsown risk characteristics and highway industry’s risk characteristics. On this basis, the authorpoints out the application of βcoefficient in China and the existing problems in thisapplication.This paper uses the theory of finance, statistics, economics and industrial organizationwhich are interleaved with each other. Considering the study objectives, the main methods arespecification and qualitative analysis, as well as the quantitative analysis base on therequirements of exposition and description. According to the method and idea of design, themain content of this paper is divided into four parts.Firstly, this article points out the research background and research significance andintroduces the research status at home and abroad. On this basis, the author determines thecontent of this study and research framework.Secondly, in the second and three chapters, this article introduces highway industry’s riskcharacteristics and βcoefficient’s basic theory and combines the Finance and Economicswhich can pave the way for the later chapters of analysis. Thirdly, in the four chapter, this article applies single-index model method to estimatinghighway listing Corporation and industry βcoefficient calculation. At last, points out thetrends of average risk,systematic risk and the industry’s overall risk and average risk based onthe comparison of valuation. Combining with the correlation theory of industrialorganization summed up the highway listing Corporation stock‘s market risk characteristics,itself risk characteristics and the industry risk characteristics.Finally, in the five chapter, the article states the application of βcoefficient and pointsthat we should notice the limitations of βcoefficient application in our securities market. Inconsideration of this limitation, investors and appraisers ought to cautiously use of βcoefficient in actual business operation.