the effect of a corporate culture of ethics on shareholder wealth...

Peter Heysel, APRJ-699, Applied Project

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The Effect of a Corporate Culture of Ethics on Shareholder Wealth Maximization

Peter Heysel

APRJ-699

Word Count: 13,657

March 31, 2013

Supervisor: Dr. Steve Johnson


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1. Abstract

Today more than ever corporations are faced with the challenge of strategically

investing in Corporate Social Responsibility initiatives. Pressure from a wide variety of

stakeholders makes the decision as to which of the many forms of CSR to invest in all

the more difficult. A key challenge presented to executive management in this context is

how to balance this pressure to be seen as socially responsible with what many in the

academic literature would say is the primary responsibility of management, the

maximization of shareholder wealth.

This paper focusses on one facet of CSR which deals with building a culture of ethics

within an organization and the effect this strategy has on increasing shareholder wealth

for an organization.

In developing this type of culture, firms not only instill a process of ethical business

decision making within the organization, but also support an approach to stakeholder

capitalism within the firm. Academic literature is divided on the effectiveness of this

particular approach to CSR in maximizing shareholder wealth. This is primarily a result

of the difficulty in measuring the tangible benefits to shareholders of the investment

made by the organization in developing and maintaining a culture of ethics.

This paper seeks to find evidence of the benefits of these investments from the

perspective of the shareholders of the organization through an analysis of the financial

performance of a group of leading companies recognized by a third party as the World’s

Most Ethical Companies. The shareholder wealth created by these organizations is then

compared to that of other global companies recognized both for their commitment to

CSR as well as their leadership in multiple other key performance measurements and

leading to the recognition as the World’s Most Admired Companies. The companies in

both groups consistently earned their respective recognition during the period 2007 –

2012.

The analysis employs multiple financial performance indicators that measure both return

and the risk associated with that return. Methods including total return, arithmetic and

geometric mean returns, coefficient of variance as well as the beta coefficient used in

conjunction with the Capital Asset Pricing Model are used in this study. Comparisons

are made between investments in the individual corporate shares, investments in the

two groups of companies as separate portfolios and the market as a whole during one

of the most challenging financial crisis in human history.


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From this analysis recommendations are made in the area of corporate strategy,

corporate ethics, individual investment strategy, the relationship between stakeholder

and shareholder capitalism and financial performance measurements in general.


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2. Table of Contents 1. Abstract ....................................................................................................................... 2

3. Introduction ................................................................................................................. 6

4. Research Purpose ....................................................................................................... 8

4.1 Purpose ................................................................................................................. 8

4.2 Management Issues .............................................................................................. 8

4.3 Scope: ................................................................................................................... 9

4.4 Assumptions ........................................................................................................ 11

4.5 Research Question .............................................................................................. 11

5. Literature Review ...................................................................................................... 11

5.1 Corporate Ethics .................................................................................................. 11

5.1.1 Background....................................................................................................... 11

5.1.2 Benefits ............................................................................................................. 14

5.1.3 Costs ................................................................................................................ 14

5.2 Shareholder Wealth Maximization ....................................................................... 16

5.2.1 Corporate Goal ................................................................................................. 16

5.2.3 Measuring Shareholder Wealth ........................................................................ 18

6. Research Design and Data Collection ....................................................................... 20

7. Results ...................................................................................................................... 25

7.1 Model 1 – Total Return and Degree of Risk of Ownership ................................... 26

7.2 Total Return and Coefficient of Variance for the Portfolios .................................. 28

7.3 Model 2 – Capital Asset Pricing Model ................................................................ 30

7.4 CAPM Analysis of Investment Portfolios .............................................................. 34

8. Analysis ..................................................................................................................... 35

8.1 Market Environment ............................................................................................. 35

8.2 Outliers ................................................................................................................ 36

8.3 World’s Most Ethical Companies – Individual Organizations ............................... 37

8.4 World’s Most Admired Companies – Individual Organizations ............................ 38

8.5 The Groups as Investment Portfolios ................................................................... 39


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8.6 The Companies Common to both Groups ........................................................... 42

9. Recommendations .................................................................................................... 46

9.1 Corporate Strategy & Corporate Ethics: .............................................................. 46

9.2 Individual Investment Strategy: ............................................................................ 47

9.3 Arithmetic Mean Return vs. Geometric Mean Analysis: ....................................... 47

9.4 Stakeholder Capitalism vs. Shareholder Wealth Maximization: ........................... 48

9.5 CAPM & Beta Coefficient: .................................................................................... 48

10. Conclusions ............................................................................................................. 48

11. References .............................................................................................................. 51

12. Appendices ............................................................................................................. 53

Appendix 1 - Summary of Results ............................................................................. 53

Appendix 2 - Detailed Calculations for WMEC Group of Companies......................... 54

Appendix 3 - Detailed Calculations for WMAC Group of Companies......................... 65


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3. Introduction

Business organizations have limited resources but are faced with an ever growing

myriad of opportunities in which to make investments. Deciding which strategy to

choose to best deploy their resources in the pursuit of maximizing shareholder wealth is

a vital role of business leaders in North America.

These decisions begin with the strategic planning process during which time the

company decides how to support its mission and value statements. In determining

which strategies to follow leaders must consider multiple stakeholders often with

competing interests. Typically these stakeholders can include; owners, directors,

managers, employees, suppliers, customers, governments, NGO’s, the media, charities

and religious groups, business organizations, competitors and the community at large.

The degree to which the organization will invest in the area of Corporate Social

Responsibility (CSR) is one of many investment decisions that must be evaluated. To

further complicate this decision the area of CSR is broad with competing subcategories

in which the firm can focus its investments. Areas the organization can focus their

attentions include (Sexty, 2011):

Corporate Sustainability

Social Impact Management

Utilizing a Triple Bottom Line approach (economic, ethical, environmental) in

performance evaluation

Corporate Philanthropy

Corporate Volunteerism

Corporate Sponsorship

Each of these initiatives can benefit multiple stakeholders in various ways. For

example, a Triple Bottom Line approach benefits society at large through an improved

environment and government through lower enforcement costs. But it also benefits

employees through an improved sense of pride in their work. Presumably this then in

turn benefits owners through improved efficiencies of employees. In a similar fashion

corporate philanthropy and volunteerism benefit both the recipient charities and

employees and owners alike.

Another of these subcategories of CSR is the creation of a “Culture of Ethics” within the

organization. Ethisphere (2012) uses five categories in determining the World’s Most

Ethical Companies. Under the category of Culture of Ethics it describes, “This category

looks at the culture of ethics at the organization concerning widely accepted or

unaccepted norms as it pertains to ethical conduct. Starting with adoption of a values-


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based culture and building on those core guidelines by having the workforce buy into

the culture and not only know it, but live it.” The culture that is developed then is the

lens through which all business decisions in the company are evaluated. The impact of

this culture of ethics reflected through Aflac Corporation’s CEO, Daniel Amos, message

to employees regarding the firm’s Code of Ethics (Aflac, 2012):

“It is important to remember that, by working at Aflac, we have made a commitment to

ethical and lawful business conduct, and we must make all of our business decisions in

this light. It is important to note that, because our business depends on Aflac's

reputation for integrity and principled business conduct, the policies discussed in this

Code may go beyond the requirements of the law. The Code serves as our primary

guide and shows us what is expected of us in all of our business activities.”

It is difficult to argue against the creation of this type of culture within an organization.

However, as with any initiative, investment in both time and money are required to be

made in order to establish this type of culture within an organization. Cohen (2008)

estimates the timeframe for changing a culture in an organization and “making it stick”

to be 3 to 5 years of “relentless efforts”. “In order to achieve lasting integration of the

change, leaders must model the new behavior themselves, and reward and recognize

others who also demonstrate the new behavior” (Cohen, 2008). This requires an

ongoing investment of the time of a key member of the executive.

Despite the significant effort required to establish and maintain a culture of ethics, the

tangible results or financial returns for these efforts are difficult to measure. The results

are gained through secondary activities like employee engagement, increased customer

approval of business practices and reduced risks. It would be useful for the leaders of

business to be able to point to a more causal relationship between embarking on a

culture of ethics in their organization and improvements in the maximization of

shareholder wealth. The question is not whether a culture of ethics would tend to

increase shareholder wealth, but rather would embracing a culture of ethics improve

shareholder wealth relative to other strategies in which businesses could invest.

To help answer this question, this research paper will analyze the financial results of

two groups of companies in terms of each one’s ability to increase shareholder wealth.

Group 1 will consist of companies that have invested in and committed to a culture of

ethics and Group 2 will consist of companies that, while demonstrating a commitment to

ethical business practices, do not differentiate using a culture of ethics. A comparison

study of these 2 analyses will be performed to see what can be understood from it.

This study will focus on topics of finance specifically as they relate in the area of

business ethics.


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4. Research Purpose

4.1 Purpose

The purpose of this research paper is to evaluate the effect a culture of ethics has on an

organization from the standpoint of the shareholder. Does this strategy help to increase

shareholder wealth maximization versus other strategies an organization can follow?

4.2 Management Issues

The management issues that led to exploring this topic include:

i. Corporate Social Responsibility (CSR) and Corporate Ethics

This is a very broad management issue facing organizations today. The field includes

topics from corporate philanthropy and sponsorship to environmental responsibility and

sustainability. Included in these topics is the issue of corporate ethics and how

organizations address ethical considerations when evaluating business decisions on a

daily basis. One specific method of ensuring all members of the organization act in an

ethical manner is to instill a Culture of Ethics into the organization. Such a culture of

ethics is evident when individuals live and breathe the company’s commitment to acting

ethically in the way they carry out their daily functions. Such a culture is difficult to

initiate and to maintain requiring the commitment from the top of the organization to the

bottom.

ii. Strategic Planning

Each organization must determine the optimum strategy of achieving their goals. Any

organization wide initiative must support the company’s mission statement to be

effective in meeting the goals of the organization as it is bound to require resources and

focus to be successful. The commitment to instill a culture of ethics in an organization is

one such strategic planning decision. In choosing this strategy, organizations must

determine that funding this initiative better serves its mission over other strategic

options available to it such as dedicating the resources to differentiation or cost

leadership. This is not to say organizations that follow a culture of ethics do not

differentiate or cannot be cost leaders. It does however mean that some of the


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resources and the focus of the organization have been diverted from these other

strategic initiatives to instilling and maintaining a culture of ethics.

iii. Shareholder Wealth Maximization (SWM)

Shareholder wealth maximization is, or should be, the primary objective of managers

and employees in any corporation. “The wealth of corporate owners is measured by the

price of the common shares which in turn is based on the timing of returns (cash flows),

their magnitude and their risk” (Gitman & Henessey, 2008). All decisions made by the

firm should support the maximization of shareholder wealth.

iv. Stakeholder Capitalism

While shareholders are one of the important stakeholders of an organization,

stakeholder theory proposes that they are not the only ones that should be considered

when making decisions. “Stakeholder capitalism is an economic system in which

corporations accept broader obligations beyond financial ones for shareholders… In

stakeholder capitalism corporations are expected to behave with greater social

responsibility and be sensitive to the ethical considerations of their actions.” (Sexty,

2011).

The way in which these management issues interact in companies that commit to a

culture of ethics is the central theme of the paper.

4.3 Scope:

The examination of the effect of a culture of ethics on the shareholder wealth

maximization of organizations focussed on two groups of organizations. The first group

of companies is used as a benchmark for organizations with a culture of ethics. Each

company has demonstrated a commitment to developing a culture of ethics in their

respective organizations and has been recognized as doing so by Ethispere TM Institute

(Ethisphere, 2012). The EthisphereTM Institute is a research-based organization which is

dedicated to the advancement of business ethics, corporate social responsibility, anti-

corruption and sustainability. Since 2007, the institute has published an annual list of

what it has determined to be the World’s Most Ethical Companies (WMEC). In order to

be recognized as one of the world’s most ethical companies each organization is

evaluated in the following areas:

1. Ethics and Compliance Program

2. Reputation, Leadership and Innovation

3. Governance

4. Corporate Citizenship and Responsibility


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5. Culture of Ethics

While several organizations have been recognized by Ethisphere on its WMEC List,

only 23 have achieved this status every year since the organization began evaluating

companies. Of this list, 19 companies are publicly traded and detailed historic data on

the share price and dividend payments are publically available. This core group’s

shareholder wealth maximization performance from 2007 to 2012 is analysed in this

paper.

In order to benchmark this first group’s performance, a second group of companies is

used as a comparison. Fortune Magazine evaluates corporations on the following

criteria to arrive at its determination of the World’s Most Admired Companies (WMAC)

(Hay Group, 2012):

1. Innovation

2. People management

3. Use of corporate assets

4. Social responsibility

5. Quality of management

6. Financial soundness

7. Long-term investment

8. Quality of products/services

9. Global competitiveness

The companies on the WMAC list are highly regarded organizations that have

demonstrated a high degree of social responsibility. However this group has not sought

to differentiate through building a culture of ethics in the organization. Both groups span

a number of industries and investing in either set of companies would offer a diversified

portfolio. Therefore, the WMAC list of organizations offers an excellent group of

comparative companies that apply their resources and attention differently than the

WMEC’s.

Of the many organizations that have been honoured on the WMAC list over the years,

the comparison group was selected from the companies that appeared most often on

the top 50 WMAC list since 2007. Of this group of 4 companies, Starbucks, General

Electric, Deere & Company and American Express also made the WMEC list each year

since inception. These were included in the WMEC group and the next highest scoring

companies were added to the WMAC list.


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4.4 Assumptions

The WMEC list is an acceptable representation of a group of companies that commit to

a culture of ethics, and that by analyzing the ability to increase shareholder wealth,

inferences can be made to other organizations following a similar strategy.

The analysis is done using US dollars as the common currency. The effect of

fluctuating currency rates is assumed to not be part of the investment strategy of the

investor and therefore the conversion to USD is done using the rate as of the first

trading day in 2007.

From a return perspective it is assumed that a shareholder does not trade in the stock

after acquiring the initial shares in 2007. That is, the fluctuation in share price

throughout the year does not affect shareholder wealth maximization and the last

trading day of the year is assumed to be value of the stock for purposes of the analysis.

For the purposes of calculating the overall return of the investment, interest on

dividends paid throughout the year is ignored. All dividends are assumed to be paid on

the last trading day of the year.

4.5 Research Question

By ingraining a culture of ethics into their organization, companies benefit from reduced

risk in their business decisions relative to comparable firms. This lowered amount of risk

incurred, results in added stability to financial performance and thereby reduces the risk

of the investment for the shareholders.

Through the analysis of the change in share price and dividend payment decisions of

the 2 groups of companies described above, the hypothesis that, compared with other

organizations, the most ethical companies increase shareholder wealth at a greater rate

when risk is taken into account, will be evaluated.

5. Literature Review

5.1 Corporate Ethics

5.1.1 Background

In its 2011 National Business Ethics Survey (NEBS), the Ethics Resource Center (ERC)

2012) observed a “bifurcated picture and pattern” of the corporate ethics landscape in

the US (Ethics Resource Center, 2012). On one hand the level of unethical behavior

observed in the workplace had fallen and incidence of reporting had risen. Both are

signs of an overall improvement in ethical behaviour in the workplace. However the


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survey also indicated that the level of retaliation against whistleblowers had increased

sharply, the percentage of employees that felt pressure to compromise their standards

rose to nearly an all-time high, and the percentage of companies categorized as having

weak ethics cultures increased significantly as well. The ERC interpreted these latter

observations to mean the degree of ethics in the workplace is expected to decline in the

coming years unless business leaders are able to change behaviors in their

organizations. Gagne et al (2005) note that few executives set out to lead unethical

companies, but with today’s focus on controlling costs, investments sufficient to drive to

a culture of ethics, are difficult to justify.

The concept of ethical behaviour in the business setting has evolved over time. In

recent decades the focus in this area has increased. Brooks (1989) observed six driving

factors for this increased attention being paid to corporate ethics.

1. A crisis of confidence about corporate activity - Society growing increasingly

skeptical about the actions of business and the motivations behind them has led

to a general increased lack of trust of the corporation. This is as well reflected at

the executive level of organizations who through the emphasis of ethics in

business, seek to better control the activities of the organization to mitigate

potential legal risk.

2. Increased attention to quality of life issues – Society has begun to value health

and welfare more than ever. Issues like pollution, second hand smoke and health

and safety violations are considered to be unacceptable by the majority in

society. This attitude is reflected in increasingly stringent legislation directed to

improve quality of life issues.

3. Increased expectation of accountability – There exists a growing sense that

society now expects corporations that transgress the law are to be held

accountable for their actions. This includes a desire to hold the executives of the

firm to account as well.

4. Growing power of special interests groups – Special interests groups, in

particular minority interests, institutional investors and ethical investors have

increasingly gained prominence in both society and the equity markets. This

power allows these groups to influence the corporation through consumer and

investor activism.

5. Growing sense of public awareness – Society has been increasingly made aware

of the previous 4 factors through both the conventional media and a growing

genre of specialized publications. Organizations publishing lists of businesses

that excel in the area of corporate ethics such as The Canada’s Top 100

Employers (MediaCorp, 2012) or The World’s Most Ethical Companies

(Ethisphere, 2012), develop the concept of corporate ethics into a competition in

which companies are forced to compete to win public favour.


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6. The Growing importance of all 5 Factors – The driving factor for this observation

is the growing awareness by corporate executives that the 5 factors combined,

would ensure the “truth would eventually come out”. This realization would then

force a shift in corporate strategy to lessen the focus on short term profit

maximization as the singular goal for organizations. In a pre-internet 1989, when

Brooks first published this hypothesis he was observing events like the

revelations of the Watergate scandal and the effects they had on the US

administration. In today’s information age of global connectivity, this is all the

more relevant an observation.

In the wake of such scandals as Enron and WorldCom in the beginning of the new

millennium, the topic of ethics in business accelerated. To a large extent this was due to

the subsequent enactment of the Sarbanes Oxley Act (SOA) in 2002 in the US which

was meant to prevent such ethical breaches in the future through stronger financial

regulation of corporations.

While much has been written regarding ethical decision making and its implications in a

business context, an important differentiation needs to be made to highlight the

difference between business ethics and ethical business. Sexty (2011) defines business

ethics as the “rules, standards, codes, or principles that provide guidance for morally

appropriate behaviour in managerial decision making relating to the operation of the

corporation and business’s relationship with society. It is broadly defined to include

corporate social responsibility, sustainability, corporate citizenship, corporate

governance, triple bottom line, accountability, and environmental stewardship.” Thus

business ethics is a set of guidelines for business people to use to avoid making a

“wrong” decision.

Ethical business on the other hand is somewhat more complex. As described by

Prakash (2012), ethical business is a state of being rather than a set of guidelines. This

state can be described as “a systemic enmeshment of various institutions that enable

and support the coming together of ethics and business in a way that makes ethical

business a norm rather than an exception”. It is an environment of ethical business that

a culture of ethics seeks to establish.

The introduction of the SOA established a baseline for ethical behavior with regards to

the financial reporting of companies. This legislation raised the bar in terms of the

personal liability of the leaders of an organization to ensure honest and accurate

information on the company’s financial performance was made public in a timely

manner. By setting this bar, the legislation also establishes the second level of Carrol’s

(2004) Pyramid of Global Social Responsibility and Performance. This level, just above

the corporation obligation to be economically viable, establishes the minimum step on

the road to behaving ethically, obeying the law. While obeying the law and acting


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ethically are not the same, an organization cannot achieve ethical business practices

without first coming into legal compliance.

5.1.2 Benefits

In order to manage ethics in the work place, organizations invest in programs and

establish Codes of Conduct or Codes of Ethics. The general benefits of these

investments are to reduce costs and manage risks. Sexty (2011) observes some of the

specific benefits of these types of programs to be:

There have been many improvements in business practices and benefits to society as a result of attention paid to ethics in the past. Some practices are no longer considered acceptable, for example misleading advertising, child labour, and price fixing.

Turbulent times have increased the awareness of ethics, and business leaders need a moral compass and to be sensitive to acting consistently.

Ethics programs align corporate behaviour, especially that of managers and employees, with the principal ethical values preferred by the leaders of the business enterprise.

Employees are prepared to face the reality of moral dilemmas; that is, to be sensitive to what might be considered good or bad.

A focus on ethics sensitizes managers and employees to the legal requirements in a moral dilemma.

Criminal acts are more likely to be avoided, as such behaviour is likely to be detected earlier and violations caught within the organization.

Awareness of ethics helps managers to integrate values with quality management practices and strategic management.

The implications or influence of management decisions on various stakeholders is more likely recognized.

A more favourable public image is created for the business organization.

5.1.3 Costs

In establishing a Culture of Ethics, Gagne et. al (2005) citing Andrews (1989) noted

three significant challenges an organization must overcome:

1. The development of managers and employees as moral, ethical individuals.

2. The development of an environment where the organization as a whole shares a

clearly defined strategy, values and standards of conduct.

3. The formulation and implementation of explicit ethical policies and the provision

of safeguards to ensure that the policies are observed.

Each of these challenges must be met with significant investment of resources in order

for the organization to realize the benefits noted above. These investments take the

form of both time and money. For this reason Gagne et al (2005) set out to develop a


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framework similar to that used in the more familiar cost of quality measurement of Total

Quality Management (TQM). In TQM both the prevention and appraisal costs in

attaining a quality standard are measured in conjunction with the internal and external

costs of the failures of such programs to combine and form a total cost of quality.

Similarly, Gagne et al develop a framework to capture the total costs of corporate ethics

initiatives including prevention and appraisals costs and the costs of the failure of

existing programs, including both internal and external costs, to arrive at a total cost of

ethical behaviour. The goal therefore is to reduce costs of failure through investments

in prevention and appraisal. The framework predicts the following:

As the ethical behaviour in an organization increases, investments in prevention

decrease while investments in appraisal increase.

With increased ethical behaviour, external costs of failures of ethical programs

decrease, but the internal costs of failure of these programs increase.

Figure 1 depicts this relationship (ignoring for scale):

Figure 1: Costs of Ethics: Gagne et al (2005)

The familiar U-shaped result of the framework suggests that there may be an optimum

investment on ethics programs where the marginal costs of spending on both

prevention and appraisal initiatives equals the marginal benefits of avoiding internal and

external failures. Beyond this point, spending on ethical programs does not produce a

marginal benefit. “This would imply that there is an optimal amount of unethical behavior

an organization should tolerate” (Gagne et al 2005).


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If this optimum exists, the goal of organizations seeking to implement a culture of ethics

should be to identify this level and thereby maximize their investment. However this

theoretical point is unknown given complexity of measuring the direct effects of

individual human behaviour on the organization. Primeaux and Stieber (1997) define

that which is unethical to be any decision that inefficiently uses four scarce resources;

land, labour time, capital and entrepreneurship/creativity. By framing the question of

business ethics in this way they argue that profit maximization is an ethical business

practice.

In attempting to build a model of profit maximization Primeaux and Stieber (1997)

distinguish the difference between accounting and economic profit. Accounting profit is

concerned with revenue versus only fixed and variable costs whereas economic profit

includes in the equation opportunity costs, “those goods and services that will not be

produced from a given set of scarce resources because these same resources were

used to produce something else” (Primeaux & Stieber, 1997). These costs can be either

loss of potential income due to management’s investment in initiatives that inefficiently

use scarce resources, or increased costs by not fully taking into account the

consequences of their decisions and thereby consuming more scarce resources than

expected.

Combining these observations with those of Gagne et al (2005) demonstrates how

organizations committed to instilling a culture of ethics, must balance the benefits of the

decision to invest in these programs i.e. avoiding negative opportunity costs, against the

lost opportunity of investing in alternative strategies. Primeaux and Stieber (1997)

conclude “the more opportunity costs considerations are brought into business

decisions, both in quantity and quality, the more correct that decision will be for profit

maximizing efficiency as well as for profit maximizing ethics”.

5.2 Shareholder Wealth Maximization

5.2.1 Corporate Goal

There exists a differing of opinion of what the goal of a corporation should be depending

on the perspective taken by those asking the question. Boatright (2010) states there are

three perspectives depending on the literature; 1) Economic/Financial 2) Business

Ethics and 3) Legal. From the economic perspective, shareholder wealth maximization

(SWM) is considered the corporate goal. Business ethics, which incorporates corporate

social responsibility and stakeholder theory literature, addresses the significant

difference between the goal of SWM and the ultimate social purpose of an organization.


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Literature focussing in corporate law addresses the rights and responsibilities of both

financial and non-financial stakeholders.

Boatright (2010) proposes the justification for SWM lies in three mutually supportive

dimensions of the principle; descriptive, instrumental and normative.

The descriptive view lies in the fiduciary duty of the corporation’s management to the

shareholder to act in the shareholder’s best interest. This is both a legal duty as well as

being enforced by the marketplace in terms of mechanisms that determine control of the

corporation.

The instrumental aspect of the principle is that SWM “will most efficiently and effectively

advance the interests of shareholders and stakeholders and thus social welfare in a

market economy” Boatright (2010).

The normative dimension of the principle lays in rights and responsibilities of various

stakeholders in particular the fiduciary and stewardship responsibilities of management

to the shareholder. These responsibilities include agency contracts between

management and shareholders, and management’s safeguarding the property rights of

the shareholders with respect to the tangible assets of the corporation. The normative

principle also speaks to the observed benefits of the free movement of capital which in

turn has been observed to promote economic development and growth. This in turn

benefits everyone in the long run.

Shareholder wealth maximization (SWM) as defined by Chambers & Lacey (1997) is

“the process of making a stock as desirable as possible in the market place”.

Chambers & Lacey (1997) observe that in many markets a firm’s reputation is critical for

success. The pursuit of SWM can “force firms operating in these markets to behave as

if they cared about ethical standards” (Chambers & Lacy, 1997). Additionally, if

investors as well as consumers value ethical business practices, then ethical

considerations can affect the equilibrium prices in the market. From this the authors

conclude that SWM acts as a conduit for ethical behavior. However they add that by

maximizing shareholder wealth, using whatever business strategy, money is transferred

to the shareholders who then are able to efficiently follow whatever ethical agenda they

choose.

Based on these observations, SWM and business ethics can be considered to be non-

mutually exclusive. Without SWM the extent to which ethical business decisions can be

made may suffer and since ethical practices can be valued in the market place, the level

of SWM can be affected by these actions.


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5.2.3 Measuring Shareholder Wealth

Corporate Shares

For the individual investor, shareholder wealth is measured by the value of the shares

owned in each corporation (Gitman & Hennesey, 2008). In total, the shareholder wealth

of a business is the total outstanding shares of the company multiplied by the share

price. The value of a company’s share is affected by a myriad of factors including both

internal and external stakeholders and a host of innumerable other factors. The job of

management is to do its best to identify the factors which can affect share price and

make decisions that will tend to increase the share price rather than decrease it.

In making share-price maximization decisions management should, in addition to the

effect on other stakeholders as discussed above, take into account the effect of the

decision on the Economic Value Add (EVA) of the business. (Gitman & Hennessey,

2008).

EVA takes into account the cost of capital whereas traditional accounting profit does

not. EVA requires some restatement of traditional costs to reclassify some expenses in

an organization as investments. In doing so, EVA becomes and effective way to

measure the value of a company as:

EVA = NOPAT – (Dollar amount of invested capital X WACC%)

Where:

NOPAT = Net operating profit after tax

WACC = Weighted average cost of capital

If the result provides a positive EVA, then the company has created value over the cost

of the capital it has employed. If negative, the company has lost value. EVA therefore is

a way of making the optimization of shareholder wealth an operational goal as well.

Dividends

The second method of increasing shareholder wealth is through payment of a dividend

to the shareholders. The decision by management to pay a dividend can affect

shareholder wealth in multiple ways. It directly affects SWM by disbursing funds directly

to the individual shareholders. Indirectly it removes capital from the business that could

otherwise be used for reinvestment into the organization. The transfer of this capital has

been shown to have both a positive or negative impact on the share price and therefore

SWM. Holder et al (1998) cite several studies that demonstrate either a positive,

negative or neutral effect of dividend policy on shareholder wealth.


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Azhagaiah & Priya (2008) also observed conflicting effects of dividend payments in a

study of the Organic and Inorganic Chemical Industries in India. In their study they state

“the optimal dividend policy is the one that maximizes the company's stock price which

leads to maximization of shareholders' wealth and thereby ensures more rapid

economic growth”.

As these studies indicate, any study that proposes to historically view the change in

shareholder wealth must take into account payments of dividends as it can have either

a multiplying or offsetting effect on share price.

Risk

The relationship of risk and return is well known by most; generally the higher the risk,

the higher the expected return. In evaluating corporate share prices and their

performance prudent investors take into account the degree of risk involved in the

investment. Gitman & Hennesey (2008) describe the total risk associated with a security

as the combination of both diversifiable and nondiversifiable risk. The former is the risk

associated with random events that can be avoided through sufficient diversification of

the investment portfolio into a variety of securities. The latter, also referred to as

systemic risk, is inherent in investing in the market due to factors beyond the control of

any one firm such as political events, social trends or international incidents. It is the

nondiversifiable risk on a security that Gitman & Hennesey (2008) suggest investors

need to be cognizant of.

One measure of the effect of systemic risk on a particular share price is the beta

coefficient. This coefficient provides an “index of the degree of the movement of an

asset’s return in response to a change in the market return” (Gitman & Hennesey,

2008). Beta is commonly used in conjunction with the Capital Asset Pricing Model

(CAPM). CAPM evaluates the required return for an asset taking into account the

security’s beta coefficient, the risk free rate of return and the market rate of return. The

use of CAPM allows for a comparison between the performances of different securities

of varying risk profiles.

A second method of evaluating the level of risk of an investment is through the analysis

of the coefficient of variation (CV) of the investment (Gitman & Hennesey, 2008). This

method involves analyzing a string of historical annual returns and calculating their

arithmetic and geometric means. A reflection of the risk involved in the investment is

seen by calculating the standard deviation of the returns. The ratio of the arithmetic

mean to the standard deviation yields the coefficient of variation, a measure of both the

return and the associated risk.

In order to evaluate the historical performance of the SWM of an individual company, a

combined analysis of changes in shareholder wealth (number of shares x market price


20

of the security), dividend payments and the risk associated with the stock needs to be

undertaken.

6. Research Design and Data Collection

In order to evaluate the shareholder wealth maximization of the groups studied,

historical share price and dividend payment data was gathered from online financial

service websites. This data was then used to evaluate the ability of each organization,

and as a whole each distinct group of companies, to increase shareholder wealth while

at the same time evaluating the risk involved in owning shares in the organizations. Two

models were used to perform the analyses:

1. Analysis of total return as a percentage of initial investment in combination with

the coefficient of variation associated with the investment.

2. The required return for the investment as calculated using the Capital Asset

Pricing Model

Analysis for each of the individual shares was conducted as well as a combined return

for each of the groups studied. The two groups were also evaluated as if they

constituted individual portfolio investments focused on either the WMEC or WMAC

group of companies in order to analyze the effect of the culture of ethics on a group of

companies with similar strategies.

The key financial data that was gathered for each company studied was as follows:

Share Price:

The share price of the stock on the opening day of trading for the 2007 calendar year

was used as the initial investment point. In order to track the return, an initial investment

of in the number of shares that divided closest to $10,000 was assumed to be the

starting point. Therefore each of the portfolios had the same initial investment of

approximately $190,000 USD.

The share price on the last day of trading in each of the successive 6 years was used to

evaluate the performance of the shares in order to calculate any capital gain or loss for

the year.


21

Dividends:

Any dividends that were announced throughout the 6 year period for the shares being

evaluated were treated as being paid on the last trading day of the year and were not

reinvested in the stock.

Splits:

Any stock splits that were announced during the year were treated as taking effect on

the last trading day of the year.

Taxes:

No evaluation of the effect of differing tax treatments for capital gains and dividends was

undertaken. All returns are discussed from a pre-tax perspective.

US Treasury Bill:

Three month US Treasury Bill rates were gathered to be used as a basis for the risk

free investment required for the calculation of the required return found using the

Capital Asset Pricing Model (CAPM). An average of the daily quoted 3 month t-bill rate

was calculated for each of the 6 years and used as the risk free rate for each of the

years in the analysis.

Risk:

Risk of owning a particular share is quantified using the beta coefficient. This is also the

index of the non-diversifiable risk of owning a particular investment (Gitman &

Hennessey, 2008). The current beta coefficients quoted by Reuters (reuters.com) for

each of the stocks analysed, were gathered and used in the CAPM calculation for the

required return of the investment. In evaluating the two portfolios’ the weighted average

of the betas was used to calculate the overall beta value for each investment.

The standard deviation of the rates of return also gives an indication of the risk involved

in owning a particular security. By calculating the arithmetic mean of a series of returns,

the variance of the sequence of returns can be determines. This can give insight into

the range in which rates of return of owning the security are likely to lie.

Once the variance of returns is calculated, the standard deviation of the return can be

calculated. Plus or minus one standard deviation, or one sigma, indicates range in

which 68.3% of the returns in this type of sequence are likely to fall. Plus or minus 3

sigma is the range in which 99.8% of all returns in the series are likely to fall. Therefore


22

the smaller the standard deviation the more likely the future return is to be close to the

arithmetic mean. Given this, the less likely is the risk of a return being far off the

arithmetic mean and so owning a security with a lower standard deviation of return

incorporates less risk than owning a security with a larger standard deviation of return.

Risk / Return:

The coefficient of variance relates the rate of return to the risk involved in owning the

security. It does this by dividing the standard deviation of return by the arithmetic mean

of return. The closer the absolute value of this value is to zero the better the rate of

return to the risk of ownership involved in owning the investment. The CV gives a

convenient single measurement to evaluate the risk / return aspect of ownership.

Market Return:

The majority of the shares being studied are traded on the New York Stock Exchange

(NYSE). The NYSE composite index, NYA, was used as a measure of the overall

market return for each year. In order to calculate the return of the NYA for each year,

the quoted value of the NYA from the first trading day of 2007 was compared to that of

the last trading day of 2007. This was repeated for each of the 6 years to arrive at the

annual market return.

Data Sources:

Secondary data from the annual reports of the companies in the study, as well as

analyst’s reports on the firms will be used to gather the financial data for the analysis.

All data collected was publicly available. A combination of share price growth and

changes to outstanding shares, in combination with dividend payments will be used to

estimate increase in shareholder wealth over the time period. A risk analysis of these

historical rates of return will be used to further evaluate the SWM of each of the groups

studied.

Organizations Studied:

The purpose of this study is to evaluate the extent to which committing to a culture of

ethics has on shareholder wealth maximization. Ethisphere’s World’s Most Ethical

Companies list was selected as a source for organizations that have demonstrated a

commitment to a culture of ethics. Since its inception in 2007, 23 companies have

successfully attained this recognition each year. These companies were:


23

Table 1: WMEC List

Company Trading Symbol

1 AFLAC Incorporated AFL

2 American Express Company AXP

3 Becton, Dickinson Company BDX

4 Deere & Company DE

5 Eaton Company PLC ETN

6 Ecolab Incorporated ECL

7 Fluor Corporation FLR

8 General Electric Company GE

9 International Paper Company IP

10 Johnson Controls Incorporated JCI

11 Milliken & Company n/a

12 Patagonia n/a

13 PepsiCo Incorporated PEP

14 Rabobank Group n/a

15 salesforce.com Incorporated CRM

16 Standard Chartered PLC STAN.L

17 Starbucks Corporation SBUX

18 Swiss Reinsurance Company Limited SREN.SIX

19 Target Corporation TGT

20 Texas Instruments Incorporated TXN

21 The Gap Incorporated GPS

22 United Parcel Service Incorporated UPS

23 Xerox Corporation XRX

Of the 23 organizations that were included in the WMEC listing since its inception, 4

were removed from the study group due to the limited availability of publically available

financial data. Patagonia and Milliken & Co are both privately held, Rabobank Group is

a co-operative and Swiss Re shares are traded on the Swiss Exchange.

Forbes annually publishes a list of the World’s Most Admired Companies. To be eligible

for this honour, organizations must demonstrate, among other attributes, a commitment

to corporate social responsibility (Hay Group, 2012). Since these firms are generally

regarded by their peers to be ethical companies, but are as well evaluated on their

ability to achieve success in other areas of corporate strategy, they are considered to be

a reasonable control group. For the comparison, the shareholder wealth creation of


24

companies that have been on this WMAC list the most times out of all the companies

honoured since 2007 will be analyzed. The companies included in this group of

organizations were:

Table 2: WMAC List

Company Trading Symbol

1 American Express Company AXP

2 Apple Incorporated AAPL

3 Berkshire Hathaway Incorporated BRK.B

4 Cisco Systems Incorporated CSCO

5 Coca-Cola Bottling Company Consolidated COKE

6 Costco Wholesale Corporation COST

7 Deere & Company DE

8 Exxon Mobile Corporation XOM

9 FedEx Corporation FDX

10 General Electric Company GE

11 Goldman Sachs Group Incorporated GS

12 Google Incorporated GOOG

13 International Business Machines Corporation IBM

14 Johnson & Johnson JNJ

15 Marriott International Incorporated MAR

16 McDonald's Corporation MCD

17 Microsoft Corporation MSFT

18 Nike Incorporated NKE

19 Nordstrom Incorporated JWN

20 Southwest Airlines Company LUV

21 Starbucks Corporation SBUX

22 The Proctor & Gamble Company PG

23 The Walt Disney Company DIS

Of the 23 organizations that achieved the ranking on the WMAC list, 4 were also listed

on the WMEC during this period, Starbucks, Deere & Company, General Electric and

American Express. These companies were eliminated from the WMAC list and left in

the WMEC group of companies for the analysis.

After initial analysis of the data, it was observed that the performance of the Apple

shares in the WMAC group and the performance of the CRM shares in the WMEC

group during the observed time period both had disproportional effects on their

respective group of companies’ shareholder wealth creation results. As such, the results


25

of both groups will be analyzed with and without each of these outlying companies’

returns.

7. Results

Data:

Share price data was gathered using Yahoo Finance historical data feature

(yahoo.com). The following is a sample of the share price data collected for each of the

39 organizations:

Table 3: Sample Share Price Data for FedEx Corporation

Date Open High Low Close Volume Adjusted Close

$ $ $ $ $

31/12/2012 90.33 91.8 90.05 91.72 1451700 91.72

30/12/2011 84.47 84.51 83.33 83.51 1447200 82.98

31/12/2010 92.53 93.41 92.41 93.01 1015100 91.86

31/12/2009 84.21 84.74 83.3 83.45 1984200 81.95

31/12/2008 62.25 64.58 62.25 64.15 2237700 62.5

31/12/2007 90.14 90.22 89.01 89.17 2865100 86.41

03/01/2007 108.75 111.06 108.66 109.77 2596700 105.98

Historical dividend declaration amounts and dates were also gathered using Yahoo

Finance online service. Table 4 shows a summarized example of the dividends

declared by FedEx Corp during the period studied.

Table 4: Sample of Dividend Payment History – FedEx Corp. 2007 – 2012

Date Dividend

$

31/12/2012 0.55

30/12/2011 0.50

31/12/2010 0.46

31/12/2009 0.44

31/12/2008 0.43

31/12/2007 0.39


26

7.1 Model 1 – Total Return and Degree of Risk of Ownership

Calculations:

Using the closing price on the first day of trading in 2007 and initial investment was

calculated to the nearest share divisible into $10,000. In the case of FedEx this was 91

shares at $109.77 as shown in Table 5.

Table 5: Sample Annual Return Calculation – FedEx Corp.

Using the example of FedEx shown in Table 5 the calculation of the following values

can be observed:

Total Return of the initial investment: - $1,390.48

Total Percentage Return: -13.9200%

Geometric Mean Return: -2.4115%

The annual percentage returns were then used to calculate the arithmetic mean return,

the variance in the return each year, the standard deviation of the return and finally the

coefficient of variance in return. The coefficient of variance is the measure of the risk in

owning the investment. The higher the absolute value of the coefficient of variance, the

higher the degree of risk of ownership (Gitman & Hennessey, 2008). Sample

calculations of these values are shown in Table 6.

Purchase price 109.77$

No. of shares 91 10,000.00$

Ini tia l investment 9,989.07$

Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Capital gain year

to year

Total dollar

return

Percentage return year to

year

DP SP V(t) TD CG R R%

SP x 500 DP x 500 V(t) - V(t-1) TD + CG R / V(t) R% + 1

3-Jan-07 -$ 109.77$ 9,989.07$ -$ -$ -$ 0.0000% 1.0000

31-Dec-07 0.39$ 89.17$ 8,114.47$ 35.49$ 1,874.60-$ 1,839.11-$ -18.4112% 0.8159

31-Dec-08 0.43$ 64.15$ 5,837.65$ 39.13$ 2,276.82-$ 2,237.69-$ -27.5765% 0.7242

31-Dec-09 0.44$ 83.45$ 7,593.95$ 40.04$ 1,756.30$ 1,796.34$ 30.7716% 1.3077

31-Dec-10 0.46$ 93.01$ 8,463.91$ 41.86$ 869.96$ 911.82$ 12.0072% 1.1201

30-Dec-11 0.50$ 83.51$ 7,599.41$ 45.50$ 864.50-$ 819.00-$ -9.6764% 0.9032

31-Dec-12 0.55$ 91.72$ 8,346.52$ 50.05$ 747.11$ 797.16$ 10.4898% 1.1049

Total Return 1,390.48-$ sum R

Total Percentage

return -13.9200% Total return / initial investment

root 0.8638

product of series of

(R% +1)'s

Geometric mean -2.4115% (root)^(1/6)-1


27

Table 6: Calculation of the Coefficient of Variance for FedEx Corp from 2007 to 2012

These calculations were repeated for each of the 38 organizations studied. Detailed

calculations appear in Appendix 2 for the WMEC group and Appendix 3 for the WMAC

group of companies. The results of these calculations are summarized in Tables 7 & 8

for each of the two groups studied.

Table 7: Summarized Share Price Performance for WMEC’s, 2007 – 2012

Symbol Total Return Total Return

Geometric Mean

Return

Coefficient of

Variance

$ % %

AFL $ 2,913.84 29.1676% 4.5907% 3.5281

AXP $ 231.00 2.3194% 1.0703% 4.0844

BDX $ 2,308.17 23.2429% 3.6364% 3.2434

CRM $ 36,572.31 366.0383% 29.2420% 1.4756

DE $ 151.58 1.5297% 0.7252% 4.5944

ECL $ 6,983.20 70.0562% 9.6613% 1.8169

ETN $ 5,556.54 55.9848% 8.1468% 2.5916

FLR $ 5,218.89 52.5579% 7.3989% 3.0437

GE -$ 3,211.23 -32.1570% -5.7887% -18.7456

GPS $ 6,064.41 60.7457% 8.2322% 2.8217

IP $ 2,884.32 28.9033% 5.7991% 3.1578

Date

Percentage

return year

to year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -18.4112% -0.3993% -18.0120% 3.2443%

31-Dec-08 -27.5765% -0.3993% -27.1773% 7.3860%

31-Dec-09 30.7716% -0.3993% 31.1709% 9.7162%

31-Dec-10 12.0072% -0.3993% 12.4065% 1.5392%

30-Dec-11 -9.6764% -0.3993% -9.2771% 0.8606%

31-Dec-12 10.4898% -0.3993% 10.8890% 1.1857%

Sum -2.3956% 23.9322%

Arithmetic mean -0.3993% sum / 6

Variance 4.7864% sum of squares / n-1

Std Deviation 21.8779% sqrt of variance

Coefficient of variance -54.7961 variance / arithemtic mean


28

JCI $ 1,801.48 18.0834% 3.0291% 4.0004

PEP $ 2,639.88 26.4716% 4.3137% 2.9935

SBUX $ 1,325.40 13.3466% 2.1121% 4.8403

STAN.L $ 2,971.29 29.7574% 5.4432% 3.3915

TGT $ 1,704.45 17.1140% 2.9035% 0.3825

TXN $ 1,928.50 19.2927% 3.3142% 3.8224

UPS $ 1,367.24 13.7122% 2.5974% 4.4180

XRX -$ 5,423.61 -54.3018% -12.5150% -3.7487

Table 8: Summarized Share Price Performance for WMAC’s, 2007 – 2012


Geometric Mean

Return

Coefficient of

Variance

$ % %

AAPL $ 53,986.73 541.3723% 36.3071% 1.3519

BERK.B $ 2,307.08 23.1128% 3.5263% 3.8901

COKE $ 927.00 9.3185% 1.8352% 5.3811

COST $ 10,879.79 108.9421% 13.4527% 1.3385

CSCO -$ 2,664.00 -26.6859% -5.0213% -19.1318

DIS $ 5,369.88 53.7719% 7.8586% 2.4937

FDX -$ 1,390.48 -13.9200% -2.4115% -54.7961

GOOG $ 5,035.59 51.2821% 7.1432% 2.9326

GS -$ 3,149.38 -32.0212% -6.1995% 7.4672

IBM $ 11,070.06 111.5760% 13.8767% 1.5877

JNJ $ 2,370.75 23.8027% 4.0507% 1.7481

JWN $ 1,297.86 13.0181% 2.9559% 3.6408

LUV -$ 3,323.68 -33.2539% -6.5176% -9.5598

MAR -$ 1,760.97 -17.6296% -2.9768% 9.9979

MCD $ 12,978.73 130.3282% 15.5591% 1.1102

MSFT $ 100.20 1.0047% 0.2711% 6.6474

NKE $ 11,769.27 118.1376% 1.6548% 5.5796

PG $ 2,176.51 21.8984% 3.6137% 2.4772

XOM $ 3,053.86 30.7516% 4.8289% 2.7999

7.2 Total Return and Coefficient of Variance for the Portfolios

Each of the two groups were also analysed as a portfolio of investments collectively.

The combined capital gains and dividend payments for each group were analysed using


29

the same calculations as were used with the individual shares. Tables 9 & 10

summarize the results of the analyses for each studied group.

Table 9: Results for the WMEC Investment Portfolio

Date

Market Value of

the investment

Total Dividends

received

Capital gain year

to year Total dollar return

Percentage return year

to year

V(t) TD CG R R%


3-Jan-07 189,316.31$ -$ -$ -$ 0.0000% 1.0000

31-Dec-07 222,634.26$ 2,356.32$ 33,317.94$ 35,674.26$ 18.8437% 1.1884

31-Dec-08 133,418.44$ 3,358.28$ 89,215.82-$ 85,857.53-$ -38.5644% 0.6144

31-Dec-09 178,276.70$ 2,993.07$ 44,858.26$ 47,851.33$ 35.8656% 1.3587

31-Dec-10 226,356.47$ 3,230.19$ 48,079.77$ 51,309.96$ 28.7811% 1.2878

30-Dec-11 199,279.01$ 3,856.19$ 27,077.45-$ 23,221.26-$ -10.2587% 0.8974

31-Dec-12 243,128.33$ 4,381.59$ 43,849.32$ 48,230.91$ 24.2027% 1.2420

27.3% 20,175.64$ Total Return 73,987.66$ sum R

Total Percentage

return 39.0815% Total return / initial investment

root 1.4239


(R% +1)'s

Geometric mean 6.0670% (root)^(1/6)-1

Date

Percentage

return year to

year

Arithmetic

mean Difference Difference squared

31-Dec-07 18.8437% 9.8117% 9.0321% 0.8158%

31-Dec-08 -38.5644% 9.8117% -48.3761% 23.4024%

31-Dec-09 35.8656% 9.8117% 26.0539% 6.7881%

31-Dec-10 28.7811% 9.8117% 18.9694% 3.5984%

30-Dec-11 -10.2587% 9.8117% -20.0704% 4.0282%

31-Dec-12 24.2027% 9.8117% 14.3910% 2.0710%

Sum 58.8700% 40.7039%

Arithmetic mean 9.8117% sum / 6



Coefficient of variance 2.9080 variance / arithemtic mean


30

Table 10: Results for the WMAC Investment Portfolio

7.3 Model 2 – Capital Asset Pricing Model

The Capital Asset Pricing Model is used to determine the required rate of return of an

investment (Gitman & Hennessey, 2008). The equation for the CAPM is as follows:

kj = RF + [ betaj x (km - RF)]

Where:

kj = the required rate of return for investment j

RF = the risk-free rate of return, for this analysis the 3 month US T-bill Rate was used

betaj = beta coefficient

km = market return

Date

Market Value of

the investment

Total Dividends

received

Capital gain year



to year

V(t) TD CG R R%


3-Jan-07 189,100.51$ -$ -$ -$ 0.0000% 1.0000

31-Dec-07 216,363.43$ 1,977.89$ 27,262.92$ 29,240.81$ 15.4631% 1.1546

31-Dec-08 145,734.18$ 2,212.89$ 70,629.25-$ 68,416.36-$ -31.6210% 0.6838

31-Dec-09 200,010.18$ 2,391.32$ 54,276.00$ 56,667.32$ 38.8840% 1.3888

31-Dec-10 232,227.08$ 2,633.88$ 32,216.90$ 34,850.78$ 17.4245% 1.1742

30-Dec-11 248,871.48$ 3,099.93$ 16,644.40$ 19,744.33$ 8.5022% 1.0850

31-Dec-12 282,257.72$ 5,714.68$ 33,386.24$ 39,100.92$ 15.7113% 1.1571

16.2% 18,030.58$ Total Return 111,187.79$ sum R

Total Percentage

return 58.7983% Total return / initial investment

root 1.6166


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 15.4631% 10.7273% 4.7358% 0.2243%

31-Dec-08 -31.6210% 10.7273% -42.3484% 17.9339%

31-Dec-09 38.8840% 10.7273% 28.1567% 7.9280%

31-Dec-10 17.4245% 10.7273% 6.6972% 0.4485%

30-Dec-11 8.5022% 10.7273% -2.2252% 0.0495%

31-Dec-12 15.7113% 10.7273% 4.9839% 0.2484%

Sum 64.3640% 26.8325%






31

The overall return of the NYSE index, NYA, was used as the market return, km , for the

time period observed. The closing price of the NYA index on the first day of trading in

2007 was $9,133.08. The annual return for the index was calculated using the same

method as was used for all stock analysed and is shown in Table 11.

Table 11: Annual Market Return using NYSE Index, NYA, from 2007 - 2012

Using data from the US Department of the Treasury (www.Treasury.gov, 2013), the

average annual 3 month US T-Bill rate was calculated as follows:

Purchase price 9,133.08$

No. of shares 1 10,000.00$

Initial investment 9,133.08$

Date

Dividends

paid during

year

Stock price

at year end

Market

Value of the

investment

Total

Dividends

received

Capital gain

year to year

Total dollar

return

Percentage return

year to year

DP SP V(t) TD CG R R%


3-Jan-07 -$ 9,133.08$ 9,133.08$ -$ -$ -$ 0.0000% 1.0000

31-Dec-07 -$ 9,740.32$ 9,740.32$ -$ 607.24$ 607.24$ 6.6488% 1.0665

31-Dec-08 -$ 5,757.05$ 5,757.05$ -$ 3,983.27-$ 3,983.27-$ -40.8947% 0.5911

31-Dec-09 -$ 7,184.96$ 7,184.96$ -$ 1,427.91$ 1,427.91$ 24.8028% 1.2480

31-Dec-10 -$ 7,964.02$ 7,964.02$ -$ 779.06$ 779.06$ 10.8429% 1.1084

30-Dec-11 -$ 7,477.03$ 7,477.03$ -$ 486.99-$ 486.99-$ -6.1149% 0.9389

31-Dec-12 -$ 8,443.51$ 8,443.51$ -$ 966.48$ 966.48$ 12.9260% 1.1293

Total Return 689.57-$ sum R

Total

Percentage


root 0.9245

product of series

of (R% +1)'s


Date

Percentage

return year

to year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 6.6488% 1.3685% 5.2803% 0.2788%

31-Dec-08 -40.8947% 1.3685% -42.2632% 17.8617%

31-Dec-09 24.8028% 1.3685% 23.4343% 5.4917%

31-Dec-10 10.8429% 1.3685% 9.4744% 0.8976%

30-Dec-11 -6.1149% 1.3685% -7.4834% 0.5600%

31-Dec-12 12.9260% 1.3685% 11.5575% 1.3358%

Sum 8.2110% 26.4256%





http://www.treasury.gov/


32

Table 12: Annual Average 3 month T-Bill Rates

Year Average 3 Month US T-Bill rate for the year

2007 4.3620%

2008 1.3713%

2009 0.1598%

2010 0.1400%

2011 0.0600%

2012 0.0876%

Using the CAPM, each share was analyzed to determine the required rate of return, kd,

for the investment. This was compared with the actual return of the investment over the

6 year period and an excess / deficiency of return was calculated. Table 13 gives an

example of this calculation;

Table 13: CAPM calculation of return for FedEx Corp 2007 – 2012

In the example shown in Table 11, FedEx Corp failed to achieve the required rate of

return, kj, during the period of 2007 to 2012.

Detailed calculations using the CAPM for each of the WMEC companies are found in

Appendix 2. The same calculations for the WMAC group of companies are found in

Appendix 3. Tables 14 and 15 below summarize the results of this analysis for the

WMEC and WMAC group of companies individually.

FDX beta: 1.29

Date

Market

Value of the

investment

Total dollar

return

Percentage

return year

to year NYA Risk free CAPM k CAPM k

required

return

required

capital gain

excess

return

3-Jan-07 9,989.07$ -$ 0.0000% 0.0000%

31-Dec-07 8,114.47$ 1,839.11-$ -18.4112% 6.6488% 4.3620% 7.3120% 730.40$ 2,569.51-$

31-Dec-08 5,837.65$ 2,237.69-$ -27.5765% -40.8947% 1.3713% -53.1518% 4,312.99-$ 2,075.30$

31-Dec-09 7,593.95$ 1,796.34$ 30.7716% 24.8028% 0.1598% 31.9493% 1,865.09$ 68.75-$

31-Dec-10 8,463.91$ 911.82$ 12.0072% 10.8429% 0.1400% 13.9468% 1,059.11$ 147.29-$

30-Dec-11 7,599.41$ 819.00-$ -9.6764% -6.1149% 0.0600% -7.9056% 669.12-$ 149.88-$

31-Dec-12 8,346.52$ 797.16$ 10.4898% 12.9260% 0.0876% 16.6491% 1,265.23$ 468.07-$

Total 1,390.48-$ 62.27-$ 1,328.21-$


33

Table 14: Summary of CAPM Analysis of WMEC’s, 2007 – 2012

Symbol beta coefficient

kj excess return

$ $

AFL 1.85 -$ 2,169.64 $ 5,083.48

AXP 1.82 -$ 1,912.85 $ 2,143.85

BDX 0.65 $ 271.15 $ 2,037.02

CRM 1.36 -$ 1,125.17 $ 37,697.48

DE 1.57 -$ 2,265.47 $ 2,417.05

ECL 0.67 $ 203.82 $ 6,779.38

ETN 1.52 -$ 2,418.84 $ 7,975.38

FLR 1.39 -$ 3,245.50 $ 8,464.39

GE 1.63 -$ 2,848.64 -$ 362.59

GPS 1.28 -$ 693.20 $ 6,757.61

IP 2.26 -$ 2,663.53 $ 5,547.85

JCI 1.81 -$ 2,837.64 $ 4,639.12

PEP 0.46 $ 193.09 $ 2,446.79

SBUX 1.18 -$ 31.33 $ 1,356.73

STAN.L 1.55 -$ 2,330.15 $ 5,301.44

TGT 0.94 $ 780.47 $ 923.98

TXN 1.1 -$ 1,337.48 $ 3,265.98

UPS 0.89 $ 183.03 $ 1,184.21

XRX 1.63 -$ 2,566.52 -$ 2,857.08

Table 15: Summary of CAPM Analysis of WMAC’s, 2007 - 2012

Symbol beta coefficient

kj excess return

$ $

AAPL 1.08 $ 85.80 $ 53,900.93

BERK.B 0.52 -$ 102.55 $ 2,409.63

COKE 0.51 $ 423.55 $ 503.45

COST 0.69 $ 308.97 $ 10,570.82

CSCO 1.24 -$ 808.31 -$ 1,855.69

DIS 1.18 $ 149.99 $ 5,219.89

FDX 1.29 -$ 62.27 -$ 1,328.21

GOOG 1.03 -$ 1,339.50 $ 6,375.09


34

GS 1.41 -$ 2,592.10 -$ 557.28

IBM 0.67 $ 1,040.19 $ 10,029.87

JNJ 0.54 $ 578.46 $ 1,792.29

JWN 1.66 -$ 496.60 $ 1,794.46

LUV 1.11 -$ 253.97 -$ 3,069.71

MAR 1.52 -$ 875.16 -$ 885.81

MCD 0.39 $ 1,244.20 $ 11,734.52

MSFT 0.97 -$ 887.31 $ 987.51

NKE 0.85 $ 1,427.41 $ 379.52

PG 0.42 $ 422.25 $ 1,754.26

XOM 0.51 $ 338.96 $ 2,714.90

7.4 CAPM Analysis of Investment Portfolios

The CAPM was used to calculate the required return and excess return for each of the

combined investment portfolios for the WMEC and WMAC companies. The weighted

average of the beta coefficients was used in each case as the index of non-diversifiable

risk of each portfolio. The results of these analyses are shown in Tables 16 & 17.

Table 16: CAPM Analysis of WMEC Portfolio, 2007- 2012

Using the CAPM, the WMEC investment portfolio would be expected to lose $23,165.86

over the 6 year period. From Table 9 it can be seen that during this period the portfolio

investment returned a total of $73,987.66, or $97,153.52 over the required return based

on the CAPM.

Average Beta 1.3453

Date

Market

Value of the

investment

Total dollar

return NYA Risk free CAPM k CAPM k

V(t) R required return required capital gainexcess return

3-Jan-07 189,316.31$ -$ 0.0000%

31-Dec-07 222,634.26$ 35,674.26$ 6.6488% 4.3620% 7.4384% 14,082.03$ 21,592.23$

31-Dec-08 133,418.44$ 85,857.53-$ -40.8947% 1.3713% -55.4875% 123,534.26-$ 37,676.72$

31-Dec-09 178,276.70$ 47,851.33$ 24.8028% 0.1598% 33.3111% 44,443.20$ 3,408.13$

31-Dec-10 226,356.47$ 51,309.96$ 10.8429% 0.1400% 14.5383% 25,918.32$ 25,391.64$

30-Dec-11 199,279.01$ 23,221.26-$ -6.1149% 0.0600% -8.2468% 18,667.21-$ 4,554.05-$

31-Dec-12 243,128.33$ 48,230.91$ 12.9260% 0.0876% 17.3586% 34,592.07$ 13,638.84$

23,165.86-$ 97,153.52$


35

Table 17: CAPM Analysis of WMAC Portfolio, 2007- 2012

Using the CAPM, the WMAC investment portfolio would be expected to return $589.07

over the 6 year period. As observed in Table 10, during this period the WMAC portfolio

returned a total of $108,274.30, or $107,685.23 in excess of the required return based

on the CAPM.

8. Analysis

8.1 Market Environment

The period of time on which this analysis is focussed happens to be one of the most

chaotic in financial markets since the Great Depression (Investment Watch, 2013). The

financial crisis that began slowly in 2006 culminated with the near total collapse of

private financial institutions in the US. These events had global repercussions that

continued to affect global economies throughout the remainder of the studied period.

The results of this chaos can be seen in both the risk free rate return of the 3 month US

Treasury Bills and the overall market return as reflected in the NYSE Index, NYA.

The 3 month US T-Bill rate in 2007 started at 4.660% and averaged 4.362% for the

year. As the financial crisis unfolded the US Federal Reserve undertook several

strategies to instill confidence in the markets. One of these strategies was to lower the

cost of borrowing through reducing the 3 month t-bill rate. The result was nearly a 50

fold decrease in the average of this rate during the time period studied. This went from

4.362 % to 0.0876%.

Average Beta 0.9175

Date

Market

Value of the

investment

Total dollar

return NYA Risk free CAPM k CAPM k

V(t) R required return required capital gain excess return

SP x 500 TD + CG

3-Jan-07 198,977.41$ -$ 0.0000%

31-Dec-07 224,113.84$ 27,284.19$ 6.6488% 4.3620% 6.4601% 12,854.20$ 14,429.98$

31-Dec-08 150,511.30$ 71,283.80-$ -40.8947% 1.3713% -37.4077% 83,835.86-$ 12,552.06$

31-Dec-09 206,153.86$ 58,067.31$ 24.8028% 0.1598% 22.7698% 34,271.06$ 23,796.25$

31-Dec-10 237,967.07$ 34,447.09$ 10.8429% 0.1400% 9.9599% 20,532.79$ 13,914.30$

30-Dec-11 253,698.97$ 18,831.83$ -6.1149% 0.0600% -5.6055% 13,339.13-$ 32,170.96$

31-Dec-12 289,064.97$ 40,927.67$ 12.9260% 0.0876% 11.8668% 30,106.00$ 10,821.67$

589.07$ 107,685.23$


36

The market rate of return as reflected in the NYA index had an overall negative return

during this time period. The overall return on investment for this index during the period

was -7.55%. This is the equivalent geometric mean return, or annual compounded rate

of return of -1.300%.

While the study compares the results of the two groups of organizations, it is also in the

context of a negative return in the overall market and a drastic reduction in the risk free

rate of return that the securities in the study are evaluated.

8.2 Outliers

Each of the two groups studied included an outlier organization that provided nearly

50% of its overall return. These two companies experienced high growth and success

during the time period being studied and as such provided phenomenal returns to their

shareholders.

In the WMEC group, salesforce.com – CRM, had an overall return during the time

period of 366.04%. The company grew based on their cloud based customer

relationship management software (hence the CRM stock symbol). Software as a

service (SAS) and cloud based platforms were becoming more widely accepted from

2007-2012 and CRM was able to capitalize as the leader in its niche market.

In the WMAC group, Apple – AAPL, as well had astounding success with an overall

return of 541.37 %. The success was driven by innovative products in multiple markets

including the proliferation of music downloading from the iTunes store, several iterations

of the product category leader the iPod, and the market leading domination of the

iPhone. In 2012 AAPL surpassed MSFT’s record to become the company with highest

market capitalization of all time. This achievement was made possible by a massive

increase in the price of AAPL shares during this time period.

Since both groups had shares that acted as anomalies within the group, the affect is

somewhat cancelled when reviewing the overall performance of the two groups.

However, the performance of CRM presumably has less to do with its culture of ethics

than it does with excellent product development, marketing and overall management of

a high growth tech company. As such, it is useful to view the results of both groups of

organizations both with and without the effects of these two outliers.


37

8.3 World’s Most Ethical Companies – Individual Organizations

Model 1: Total Return and Degree of Risk of Ownership

The rates of returns for the WMEC’s during this time period ranges from a high of

366.04% with CRM to a low of -54.30% with XRX. Interestingly both companies at the

extreme could be considered high tech businesses, CRM focussed on the development

of innovative cloud based customer relationship software and XRX a leader in high

technology copying machines. The same company’s shares provided annual

compounded returns of 29.42% and -12.52% respectively.

The average annual compound return for the WMEC study group for the time period

was 4.42.

When the group is analyzed without CRM , ECL provides the highest total return of

70.06 % without geometric mean of 9.66%. In this respect the average annual

compound return of the group becomes 3.04%, or 45.4% lower than when CRM is

included in the group.

When risk and return is analyzed together using the CV for the entire group, TGT

provides the highest return with the lowest variance as seen by the lowest CV of

0.3825. GE provided the lowest average return relative to the risk of ownership as seen

by the variance in its share price. GE had the highest CV of the group at 18.7456. The

average CV for the group excluding CRM was 1.6798.

CRM provided a slightly better return for the degree of risk or variance of owning the

shares than the average of the group at 1.4756.

Model 2: Capital Asset Pricing Model

Using the CAPM to analyze the companies in the WMEC group provides the required

return based on the risk free rate of return, the market rate of return and the individual

company’s beta coefficients. In this group TGT had the highest expected return at

$780.47 and FLR had the lowest expected return at - $3,245.50. Both companies

provided returns in excess to those required using the CAPM. TGT provided $923.98 in

excess to the calculated kj . FLR returned $8,464.39 in excess of its kj which was

second in the group only to CRM that provided $37,697.49in excess of the predicted kj

of -$1,125.17.

Of note was the observation that despite the CAPM model being a linear relationship

between kj and the beta coefficient, the analysis of the time period studied did not

provide a linear relationship between the beta coefficients and the expected return. This


38

is due to the varying degrees of gains and losses in market rate of return from year to

year and the varying changes to the risk free rate of return.

8.4 World’s Most Admired Companies – Individual Organizations


As discussed earlier AAPL provided approximately half of the overall return of the

WMAC’s. The company’s geometric mean return was 36.31% year over year. The

WMAC organization that had the highest overall return when excluding AAPL from the

group was MCD with a total return of 130.33% and an annual compounded return of

15.56%. The organization whose shares’ performance ranked the lowest in the WMAC

group during the time period was LUV with a total loss in investment value of -33.25%

or -6.52% compounded annually.

The average annual compounded rate of return for the group was 3.89% when AAPL is

excluded from the group. When AAPL is included in the analysis the geometric mean

rate of return becomes 5.60% or 43.9% higher.

Among the WMAC’s, MCD provided the highest return relative to the degree of risk of

ownership with a CV of 1.11. FDX had the lowest return relative to the risk of ownership

with a CV of 54.80. As a group the average CV was 1.59 with AAPL excluded from the

analysis. Inclusion of AAPL improves the average CV to 1.44.


In using the CAPM to analyse the WMAC group, MCD is also the organization whose

shares have the highest calculated kj at $1,244.20. GS has the lowest required rate of

return as calculated using the CAPM of -$2,592.10. This is due to the combination of

GS’s relatively higher beta coefficient, 1.41, and the wide variation of the annual results

NYA during the time period studied. Excluding AAPL from the analysis, MCD is also the

organization that most greatly exceeds the calculated kj by $11,743.52. APPL does so

by $53,900.93. LUV is the organization which most underperforms the calculated kj by -

$3,069.71.


39

8.5 The Groups as Investment Portfolios

It is useful to analyse the performance of both the WMEC’s and WMAC’s as groups of

investment portfolios to evaluate the ability of each group of organizations to increase

shareholder wealth.

World’s Most Ethical Companies:


In terms of increasing shareholder wealth, the WMEC group as a whole significantly

outperforms the overall market. The WMEC portfolio returned a 39.08% gain to

investors over the tumultuous 6 years. This compares to an overall 7.55% loss seen in

the NYA index. The WMEC portfolio’s geometric mean return was 6.07% in comparison

to a -1.30% return of the market.

The WMEC portfolio exhibited a higher variance in return than the NYA during the time

period, 8.41% vs. 5.29%. This indicated a higher degree of risk in owning the WMEC

portfolio than the market in general, which would be expected. However, the risk to

return ratio, CV, demonstrates the significantly better performance of the WMEC

portfolio compared to the market as a whole, 2.91 vs. 16.80. This indicates the slightly

higher risk is more than compensated for by the returns of the portfolio.

When the portfolio is considered without CRM included, the results change significantly,

but still reveal the WMEC group to be effective in increasing shareholder wealth during

the financial crisis. The overall return during the period reduces to 20.86% for the time

period. The annual year over year return becomes 3.56%. Compared to the loss of the

market as a whole and the average US T-bill rate during the same time of 1.03%, this is

still a respectable annual return.

The risk of ownership of the portfolio without CRM reduces as seen by a lowering of the

variance in return to 6.25%. However due to the increased average annual return when

CRM is included in the portfolio, the CV increases with the exclusion of CRM to 3.83.

This indicates that while CRM drove more risk into the portfolio during the period, the

returns more than compensated for the increased risk.


40


As a group the WMEC portfolio had a weighted average beta coefficient during the time

period of 1.345 with the inclusion of CRM and basically unchanged when the

organization is excluded, 1.344. This is due to the fact that CRM’s beta coefficient, 1.36,

is very close to the group’s weighted average.

Based on an initial investment of $189,316.31 in the WMEC portfolio with CRM

included, the required return as calculated by the CAPM is -$23,165.86. Excluding

CRM, with an initial investment in the portfolio of $179,324.92, raises the required return

to -$22.040.83. Both results are -12.29% and -12.24% respectively and are largely

attributed to significant losses in the NYA during 2008. During this year the index

experienced a loss of 40.89%. Since the beta coefficient for the portfolio is higher than

1, the calculated required return during 2008 is -55.49% with CRM and -55.45% without.

This large predicated loss is not negated during the subsequent years studied.

Despite what the CAPM predicates the required return for the portfolio should be for this

time period, the WMEC group significantly outperforms this prediction. With CRM

included the portfolio exceeds the calculated required return by 519.4% or $97153.52

for this initial investment. Without CRM included in the portfolio the investment exceeds

the required return calculated by the CAPM by $59,456.18 or 369.8%. In both cases the

investment significantly outperforms the predicted required return of the CAPM.

World’s Most Admired Companies:


Similar to the WMEC portfolio, the WMAC portfolio significantly outperforms the overall

market with and without the inclusion of its outlier organization AAPL. The portfolio as a

whole returned 58.79% and 31.93% when evaluated with and without AAPL

respectively. The geometric mean return of the portfolio with AAPL included was

observed to be 8.33% compared to 4.99% without AAPL included. Again, compared to

an overall loss in the market as a whole during the time period both results speak to the

ability of the organizations in the portfolio to significantly increase shareholder wealth

even during a down market.

The variance of return of the portfolio during the time period was higher when evaluated

with AAPL included, 5.37% compared that of the portfolio without AAPL, 3.77%. This

lower variance indicates lower risk in ownership of the portfolio without AAPL, however

the improved CV of the portfolio with the inclusion of AAPL, 2.16 vs. 2.91 indicates the


41

risk would have been compensated by the higher return of including AAPL in the

investment.


The investment’s beta coefficient changes slightly with or without the inclusion of AAPL,

0.926 and 0.909 respectively. These two values result in similar calculated returns of

$589.07 or 0.42% with AAPL and $793.01 or 0.44% without AAPL. As discussed above,

both variations of the portfolio significantly outperform the calculated required results of

the CAPM. Including AAPL in the portfolio exceeds the results by $107,685.23. The

investment without AAPL exceeded the calculated value of kj by $56,408.06.

WMEC vs. WMAC Investment Portfolio:

Although the WMEC investment portfolio significantly outperformed the market as

described by the NYA index during the time period from 2007 to 2012, it did not provide

an increase in shareholder wealth over the WMAC investment portfolio. This was true

for the portfolios when the outlying organizations were both included and excluded from

the analysis.

With the outliers included, the WMAC portfolio provided shareholders with a 50.45%

higher return during the time period over the WMEC investment. This was due to a

37.37% higher geometric mean return for the WMAC portfolio.

When considering the risk involved in the investment, the variance of the return was

also lower for the WMAC group, indicating a lower risk to the shareholder than the

WMEC investment incurred. The combination of the lower risk and the higher return of

the WMAC investment provided an improved CV ratio of 2.16 vs. 2.91 compared to that

of the WMEC investment. This is a 25.74% improvement in the risk to return ratio.

Given the weighted average beta coefficient of both investments and the market returns

and risk free rates during the time period there was a significant difference in the

required returns of the two investments as calculated using the CAPM. The WMEC

portfolio had a significantly higher beta coefficient than 1. A coefficient in the range of

1.36 would tend to amplify any large swings in market fluctuation when the required

return is calculated. During the time period the market experienced multiple large

swings in overall value due to the ongoing financial crisis. The effect of both the swings

in the market and the multiplying effect of the WMEC beta coefficient can be seen in the

calculated expected return of -12.24%. The relatively higher expected return of 0.42%

for the WMAC investment during the same time period of market fluctuation is a result


42

of the group’s beta coefficient of 0.93 which is significantly closer to 1. This beta

coefficient reflects the smaller predicted variation in return compared to that of the

market that the WMAC portfolio companies had exhibited in the past. Despite the

predictions of the CAPM, both investments significantly outperform their respective kj’s.

However the WMAC investment exceeds its required return by 10.84% more than the

WMEC investment does.

When the outlying shares of AAPL and CRM are excluded from the analysis, the WMAC

investment continues to outperform the WMEC portfolio in terms of SWM. In this context

a comparison of the two investments the WMAC portfolio provided a 53.05% higher

total percentage return and a 40.34% higher year over year annual geometric return.

In terms of risk of ownership of the two portfolios, the WMAC investment without AAPL

has a 36.67% lower variance in return compared to the WMEC portfolio without CRM.

Similarly, the CV of the WMAC investment was 24.14% better than that of the WMEC

investment.

Using the CAPM to evaluate the two portfolios without the outlying shares shows the

WMEC investment exceeded its required return by 5.13% compared to the performance

of the WMAC investment.

Through extensive financial data research and calculations five important indicators

were calculated for both investment portfolios; Total % Return, Geometric Mean Return,

Variance of Return, CV and excess return vs. kj. These performance indicators were

used to evaluate the ability of the WMEC group of companies to increase shareholder

wealth vs. the comparison group of WMAC organizations. The results of these

analyses fail to provide evidence to support the hypothesis that the differentiation

strategy of ingraining a culture of ethics into an organization is more effective at

increasing SWM compared to a broader strategy of performance excellence as defined

by the WMAC selection criteria. This was observed both with and without risk being

factored into the analysis.

8.6 The Companies Common to both Groups

As previously discussed, both Fortune’s WMAC list and Ethisphere’s WMEC list share 4

companies that consistently received recognition by both organization during the time

period studied. These were AXP, DE, GE and SBUX. Each of these firms have been

recognized both as having instilled a culture of ethics within their organization as well as

demonstrating global leadership in the areas of innovation, people management, use of

corporate assets, social responsibility, quality of management, financial soundness,

long-term investment, quality of products/services and global competitiveness.


43

Throughout the analysis these four organizations were limited to inclusion in the WMEC

group of companies to keep the two groups distinct. Of interest is the analysis of how

shares in these 4 companies common to both groups performed.

Model 1: Total Return and Degree of risk of Ownership

The results of these companies common to both groups in terms of total return and

degree of risk of ownership are shown in Table 18.

Table 18: Summarized Share Price Performance Companies Common to both WMEC

and WMAC Groups, 2007 – 2012


Geometric Mean

Return

Coefficient of

Variance

$ % %

AXP $ 231.00 2.3194% 1.0703% 4.0844

DE $ 151.58 1.5297% 0.7252% 4.5944

GE -$ 3,211.23 -32.1570% -5.7887% -18.7456

SBUX $ 1,325.40 13.3466% 2.1121% 4.8403

In terms of total return, geometric mean return and coefficient of variance when

compared to the WMEC group these shares significantly underperform ranking in the

bottom 4 of 5 companies. The performance of the group appears to improve when

compared to the WMAC group resulting in not the lowest rankings but still dispersed

throughout the bottom half of the group. This is an apparent anomaly since the WMEC

group as a whole, of which these four shares were a part of, underperform the WMAC

group. The fact that this group ranks near the bottom of the WMEC group, but improves

its standings when compared to the WMAC group is related to the variance of the

performance within each of the 2 groups which is depicted in Table 20.


44

Table 20: Variance of Performance within WMEC and WMAC Groups

The WMEC group of companies had a variance in geometric mean of 0.6192%

compared to nearly double that of the WMAC group of 1.0288%. Similarly the variance

of coefficient of variance for the WMAC group was significantly higher, nearly 11 times

higher, at 151.79 versus a variance of 13.9 observed for the WMEC group’s CoV.

Both of these observations reflect the much larger spread of these performance factors

seen within the WMAC group. This is the reason that the 4 common organization’s

shares rank higher in this group despite the overall lower performance of the WMEC

group of companies.

As a subgroup, shares in these four companies failed to perform better than the

combined performance of either the WMEC or WMAC groups. Table 21 details the

overall performance of this subgroup.

Geometric

Mean

Return GM Var

Coefficient

of

Variance CoF Var

%

WMEC Group

ari themtic mean 4.4164% 4.04

sum of di fferences squared 11.1449% 250.14

variance 0.6192% 13.90

s tandard deviation 7.8687% 3.73

WMAC Group

ari themtic mean 5.5996% 7.35

sum of di fferences squared 18.5184% 2,732.14

variance 1.0288% 151.79

s tandard deviation 10.1430% 12.32


45

Table 21: Results for the Subgroup of 4 Common Shares Investment

As seen in Table 21, the subgroup provided a negative return for the time period. These

results failed to meet the performance indicators of total percentage return, geometric

mean return or coefficient of variance of either the WMEC or WMAC groups. Due to the

much smaller size of the investment portfolio, the very poor performance of GE

significantly affects the results of the overall subgroup. Despite this however, the

subgroup did outperform the overall market during the time period.

The results the analysis of the financial performance of this subgroup of shares do not

provide evidence to support the hypothesis that differentiating using a culture of ethics,

with or without the incorporation of a broader strategy of performance excellence,

increases an organization’s ability to maximize shareholder wealth.

Date

Market Value of

the investment

Total Dividends

received

Capital gain year



to year

V(t) TD CG R R%


3-Jan-07 39,785.02$ -$ -$ -$ 0.0000% 1.0000

31-Dec-07 39,988.21$ 574.23$ 203.19$ 777.42$ 1.9541% 1.0195

31-Dec-08 21,026.26$ 560.46$ 18,961.95-$ 18,401.49-$ -46.0173% 0.5398

31-Dec-09 27,517.79$ 397.95$ 6,491.53$ 6,889.48$ 32.7661% 1.3277

31-Dec-10 32,612.69$ 420.92$ 5,094.90$ 5,515.82$ 20.0446% 1.2004

30-Dec-11 31,228.00$ 525.67$ 1,384.69-$ 859.02-$ -2.6340% 0.9737

31-Dec-12 35,189.88$ 612.66$ 3,961.88$ 4,574.54$ 14.6488% 1.1465

3,091.89$ Total Return 1,503.25-$ sum R

Total Percentage


root 0.9792


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 1.9541% 3.4604% -1.5063% 0.0227%

31-Dec-08 -46.0173% 3.4604% -49.4777% 24.4804%

31-Dec-09 32.7661% 3.4604% 29.3057% 8.5882%

31-Dec-10 20.0446% 3.4604% 16.5842% 2.7504%

30-Dec-11 -2.6340% 3.4604% -6.0944% 0.3714%

31-Dec-12 14.6488% 3.4604% 11.1885% 1.2518%

Sum 20.7622% 37.4649%






46

9. Recommendations

9.1 Corporate Strategy & Corporate Ethics:

As discussed above, the group of companies that differentiated using a culture of ethics

in their organizations significantly outperformed the market as a whole in generating

shareholder wealth during the time period studied. This strategy served the

shareholders of the WMEC group very well during a period in global financial history

described by many as the worst since, if not surpassing the extent of, the Great

Depression (Investment Watch, 2013). While not all companies in the WMEC studied

group performed better than the market in increasing shareholder wealth, 17 of the 19

organizations studied were able to not only beat the market, but managed to

significantly do so.

While improving shareholder wealth maximization relative to the market as a whole, the

shareholders in this group incurred 53.6% more variance in their returns indicating

higher risk. This increased risk was more than compensated for when the CV of the

group, 2.91, is compared to that of the market as a whole, 16.80.

In relation to the WMAC group, this group failed to increase shareholder wealth at a

greater rate regardless of the metric used to analyse the increase in shareholder wealth.

This would tend to suggest something in the strategy the WMAC’s individually and

collectively follow is superior to the strategies of the WMEC’s. Conclusive identification

of what the elements of the strategies are that drive this increased performance in SWM

is beyond the scope of this research. However, perhaps the supposition by Gagne et al

(2005) that “there is an optimal amount of unethical behavior an organization should

tolerate” is given support through the results of this research.

While a culture of ethics is certainly only one facet of the WMEC’s corporate strategies,

it is one that influences all others since it is the guiding principle that has been

engrained into the organization. Whether or not this strategy detracts from the core

responsibility of the management to increase shareholder wealth, and therefore is

partially responsible for this failure to outperform the so called crème de la crème of

global organizations found in the WMAC is difficult to say for certain. What this study

does reveal is that a group of companies, from a wide variety of industries, that share

one thing in common, that is a culture of ethics in their organizations, was able to

significantly outperform the market as a whole from a risk / return basis for

shareholders.

The general observation that can be made based on the results of this research is that a

culture of ethics generally does not detract from increasing SWM. When compared to


47

the market as a whole companies that incorporated this strategy into their organization

were generally better able to thrive, especially given the time period studied posed

extreme challenges across a broad spectrum of industries. Given this, a

recommendation for firms looking to increase shareholder wealth to incorporate a

culture of ethics into their organizations can be made.

9.2 Individual Investment Strategy:

The results of this research indicate that when an organization has adopted a culture of

ethics, the shareholders of the company’s stock generally realized higher returns than

available in the general market. As such, individual investors should consider

companies that incorporate a culture of ethics into their organizations when looking for

stocks in which to invest.

As discussed previously the vast majority of companies from the WMEC group

significantly outperformed the overall market with an improved CV. However when the

results of individual companies in this group are analysed, one can see a wide range of

performance from significant losses in the case of XRX, to significant gains in the case

of CRM. This variation in return emphasizes the fact that investment decisions are

complex and require analysis of multiple factors.

When the returns of this group of companies is compared with those of the WMAC

group, the value in incorporating more than a company’s approach to CSR to an

investment strategy is highlighted. Those shareholders seeking to maximize their own

wealth would be encouraged to investigate the ability of companies within ethical

investment funds to generate shareholder wealth in addition to their commitments to

ethical business practices.

9.3 Arithmetic Mean Return vs. Geometric Mean Analysis:

As seen in Appendix 1, Summary of Results, the annual arithmetic mean percentage of

return is higher than the geometric mean return during the time period studied for each

of the 38 companies analysed. The variance ranges from less than 0.25 percentage

points to over 20 percentage points. In some cases such as GS, the arithmetic mean

return provides a value of 7.94%, whereas the investment had an overall negative

return with a geometric mean return of -6.20%. This characteristic of the two different

measurements observed in the research highlights the importance for the individual

investor to properly research share performance and be able to distinguish between

these two quoted performance measures prior to investing.


48

9.4 Stakeholder Capitalism vs. Shareholder Wealth Maximization:

Stakeholder Capitalism is “an economic system in which corporations accept broader

obligations beyond financial ones for shareholders” (Sexty, 2011). In order to embrace

stakeholder capitalism organizations need to keep the interests of many groups that are

affected by the firm’s actions in mind when making decisions. This requires the firm to

ensure that stakeholders are considered by all those in the organization making

decisions. This is likely to be a large number of employees. This requirement highlights

the compatibility of the adoption of a culture of ethics and stakeholder capitalism. The

two approaches to business are aligned. An organization with a culture of ethics

inherently must also follow a stakeholder capitalistic approach to business.

In this regard, stakeholder capitalism can also be analyzed to some degree using the

results of this research into the WMEC group of companies’ ability to increase

shareholder wealth. The results of the research would imply that stakeholder capitalism

supports SWM rather than detracting from it when the results of the WMEC group are

compared with the overall market. Based on these findings, potential investors can be

somewhat less concerned when investing in organizations which choose to adopt the

strategy of stakeholder capitalism. The ability of these companies to generate

shareholder wealth is not necessarily impeded by the adoption of the strategy. In fact,

based on the findings of this research, this ability may be enhanced relative to the

market in general.

9.5 CAPM & Beta Coefficient:

Gitman & Hennessey (2008) caution about the use of CAPM and beta coefficients in

predicting future returns of an individual share. This is a result of the combined facts

that 1) the beta coefficients are developed using historical data which “may or may not

reflect future variability of returns”, and 2) the CAPM was developed based on the

concept of an efficient market. The results of this research add to a body of work of

academic studies that suggest “the historic beta and the historic returns of common

shares do not seem to be linked” (Gitman & Hennessey, 2008).

As such the results arrived at using the CAPM and beta coefficients should be only one

element in the investment decision making process.

10. Conclusions

In today’s world of uncertain global markets and fluctuating financial markets, corporate

leaders are confronted with complex questions in relation to how best to set the

direction for the organization. In this environment ever changing and competing


49

priorities, managers are tasked with the responsibility of deciding where to best use of

the limited resources of the organization.

The academic literature offers multiple competing theories as to what is the best

strategy for businesses to follow. Boatright (2010) categorizes the literature into 3

distinct theories; 1) Economic/Financial 2) Business Ethics and 3) Legal. As discussed

in this paper, the first of these two seemingly competing theories focus on shareholder

wealth maximization and stakeholder capitalism. In order to truly ascribe to stakeholder

capitalism the organization must ingrain a culture of ethics throughout the business to

ensure the rights of all stakeholders are considered equally in decision making.

However during the chaotic financial period under review from 2007-2012, there was

enormous pressure for firms to survive. This type of environment would tend to focus

management firmly on the rights of the shareholders to maximize returns and minimize

losses.

The concept of protecting the rights of all stakeholders may lead some to think this

would detract from shareholder wealth maximization. Certainly corporations are often

viewed as not caring about ethical standards in their pursuit of SWM (Chambers & Lacy,

1997). The results of this paper’s research suggest two important observations with

regards to SWM and a culture of ethics.

1. A group of companies recognized for their commitment to a culture of ethics were

able to significantly improve the wealth of their shareholders during the financial

crisis of 2007-2012 when compared to an overall negative return for the market

as a whole.

2. This same group was not able to increase the wealth of its shareholders to the

same extent of a similar group of companies recognized for its commitment to

corporate social responsibility in general, but who was also recognized for

leadership in 8 other key performance indicators. This comparison group

outperformed the primary study group in total percentage return by 50.45% and

had a 25.74% lower coefficient of variance indicating significant improvement in

risk to return.

These results suggest companies that commit to a culture of ethics, in general, can

make for attractive investments for shareholders. However the results do not fully

support the hypothesis that compared with other organizations, the most ethical

companies increase shareholder wealth at a greater rate when risk is taken into

account.

The results may point to the question of whether a culture of ethics and SWM is a

chicken and egg situation. Boatright (2010) suggests that SWM is the most efficient way

organizations can protect stakeholder rights and advance social welfare. Whether


50

companies that are adept at increasing SMW can afford to invest the significant

resources required to both instill and maintain a culture of ethics, or if it is this

stakeholder capitalism strategy that drives the firm’s SWM is the uncertain. In either

case the recognition of the organization as one of the World’s Most Ethical Companies

may help investors identify firms that are proficient in maximizing shareholder wealth

and therefore be candidates for investment.

The results of the paper also suggest, the World’s Most Admired Companies list

published by Fortune Magazine can also be used by investors as a screen when looking

for investments that have proven track record of increasing shareholder wealth with

improved risk to return ratios.

For the individual investor, this research calls into question the usefulness of relying

solely on reported beta coefficients and the CAPM for guidance when making

investment decisions. The large variation in the CAPM’s predicted kj and the actual

returns of the 38 companies studied during the time period support Gitman and

Hennessey’s (2008) caution that historic betas and actual return do not seem to be

linked.

The analysis as to whether or not companies on the WMEC list had surpassed Gagne

et al’s (2005) theoretical minimum amount of unethical behavior in the organizations

required to maximize marginal returns on the investment in a culture of ethics was

beyond the scope of this paper. The comparative results of the two study groups

suggest that further research into this corporate ethics sweet spot is warranted.


51

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15, 2012 from http://ethisphere.com/wme/methodology.html

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Gagne M, Gavin J. & Tully G. (2005). Assessing the Costs and Benefits of Ethics: Exploring a Framework. Business and Society Review 110:2 181–190. Retrieved December 15, 2012 from http://onlinelibrary.wiley.com/doi/10.1111/j.0045-3609.2005.00010.x/full

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Investigation of the Influences of Stakeholder Theory. Financial

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credit crisis. Retrieved February 22, 2013 from http://investmentwatchblog.com/us-

1929-great-depression-vs-2008-financial-housing-credit-crisis/ .

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Prakash, R. (2012). Athabasca University, MBA Program. Ethical Decision Making

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Reuters (2013). Reuters Stock Research Webpage. Retrieved January 24, 2013 from

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53

12. Appendices

Appendix 1 - Summary of Results

Summary of Results:

Symbol Total Return

Total

Return

Geometric

Mean

Return

Arithmetic

Mean Return

Variance

of Return

Coefficient

of

Variance

beta

coefficient kj excess return

$ % % % $ $

WMEC Group

AFL 2,913.84$ 29.1676% 4.5907% 7.4133% 6.8406% 3.5281 1.8500 2,169.64-$ 5,083.48$

AXP 231.00$ 2.3194% 1.0703% 14.8952% 37.0132% 4.0844 1.8200 1,912.85-$ 2,143.85$

BDX 2,308.17$ 23.2429% 3.6364% 4.5452% 2.1732% 3.2434 0.6500 271.15$ 2,037.02$

CRM 36,572.31$ 366.0383% 29.2420% 46.1334% 46.3429% 1.4756 1.3600 1,125.17-$ 37,697.48$

DE 151.58$ 1.5297% 0.7252% 8.7858% 16.2940% 4.5944 1.5700 2,265.47-$ 2,417.05$

ECL 6,983.20$ 70.0562% 9.6613% 11.7871% 4.5867% 1.8169 0.6700 203.82$ 6,779.38$

ETN 5,556.54$ 55.9848% 8.1468% 14.8740% 14.8587% 2.5916 1.5200 2,418.84-$ 7,975.38$

FLR 5,218.89$ 52.5579% 7.3989% 14.6245% 19.8137% 3.0437 1.3900 3,245.50-$ 8,464.39$

GE 3,211.23-$ -32.1570% -5.7887% -1.4743% 7.6381% -18.7456 1.6300 2,848.64-$ 362.59-$

GPS 6,064.41$ 60.7457% 8.2322% 14.3969% 16.5032% 2.8217 1.2800 693.20-$ 6,757.61$

IP 2,884.32$ 28.9033% 5.7991% 19.9031% 39.5011% 3.1578 2.2600 2,663.53-$ 5,547.85$

JCI 1,801.48$ 18.0834% 3.0291% 9.5648% 14.6408% 4.0004 1.8100 2,837.64-$ 4,639.12$

PEP 2,639.88$ 26.4716% 4.3137% 5.5722% 2.7823% 2.9935 0.4600 193.09$ 2,446.79$

SBUX 1,325.40$ 13.3466% 2.1121% 3.0192% 2.1356% 4.8403 1.1800 31.33-$ 1,356.73$

STAN.L 2,971.29$ 29.7574% 5.4432% 13.2694% 20.2527% 3.3915 1.5500 2,330.15-$ 5,301.44$

TGT 1,704.45$ 17.1140% 2.9035% 2.9085% 0.0124% 0.3825 0.9400 780.47$ 923.98$

TXN 1,928.50$ 19.2927% 3.3142% 10.6395% 16.5390% 3.8224 1.1000 1,337.48-$ 3,265.98$

UPS 1,367.24$ 13.7122% 2.5974% 3.6222% 2.5609% 4.4180 0.8900 183.03$ 1,184.21$

XRX 5,423.61-$ -54.3018% -12.5150% -8.1196% 9.2647% -3.7487 1.6300 2,566.52-$ 2,857.08-$

WMAC Group

AAPL 53,986.73$ 541.3723% 36.3071% 56.2828% 57.8980% 1.3519 1.0800 85.80$ 53,900.93$

MCD 12,978.73$ 130.3282% 15.5591% 16.8438% 3.4968% 1.1102 0.3900 1,244.20$ 11,734.52$

NKE 11,922.27$ 119.6734% 14.2404% 15.8953% 4.0519% 1.2664 0.8500 799.21$ 11,123.06$

IBM 11,070.06$ 111.5760% 13.8767% 16.2733% 6.6760% 1.5877 0.6700 1,040.19$ 10,029.87$

COST 10,879.79$ 108.9421% 13.4527% 15.2509% 4.1669% 1.3385 0.6900 308.97$ 10,570.82$

DIS 5,369.88$ 53.7719% 7.8586% 10.7262% 7.1547% 2.4937 1.1800 149.99$ 5,219.89$

GOOG 5,035.59$ 51.2821% 7.1432% 17.9934% 27.8449% 2.9326 1.0300 1,339.50-$ 6,375.09$

XOM 3,053.86$ 30.7516% 4.8289% 5.9238% 2.7510% 2.7999 0.5100 338.96$ 2,714.90$

JNJ 2,370.75$ 23.8027% 4.0507% 4.2809% 0.5600% 1.7481 0.5400 578.46$ 1,792.29$

PG 2,176.51$ 21.8984% 3.6137% 4.0379% 1.0006% 2.4772 0.4200 422.25$ 1,754.26$

BERK.B 2,307.08$ 23.1128% 3.5263% 5.8014% 5.0930% 3.8901 0.5200 102.55-$ 2,409.63$

JWN 1,297.86$ 13.0181% 2.9559% 23.6191% 73.9483% 3.6408 1.6600 496.60-$ 1,794.46$

COKE 927.00$ 9.3185% 1.8352% 2.8209% 2.3043% 5.3811 0.5100 423.55$ 503.45$

MSFT 100.20$ 1.0047% 0.2711% 5.1448% 11.6961% 6.6474 0.9700 887.31-$ 987.51$

FDX 1,390.48-$ -13.9200% -2.4115% -0.3993% 4.7864% -54.7961 1.2900 62.27-$ 1,328.21-$

MAR 1,760.97-$ -17.6296% -2.9768% 4.1444% 17.1684% 9.9979 1.5200 875.16-$ 885.81-$

CSCO 2,664.00-$ -26.6859% -5.0213% -1.5193% 8.4490% -19.1318 1.2400 808.31-$ 1,855.69-$

GS 3,149.38-$ -32.0212% -6.1995% 7.9417% 35.1681% 7.4672 1.4100 2,592.10-$ 557.28-$

LUV 3,323.68-$ -33.2539% -6.5176% -2.9826% 8.1300% -9.5598 1.1100 253.97-$ 3,069.71-$

Combined Results

WMEC 73,987.66$ 39.0815% 6.0670% 9.8117% 8.1408% 2.9080 1.3453 23,165.86-$ 97,153.52$

WMAC 111,187.79$ 58.7983% 8.3341% 10.7273% 5.3665% 2.1595 0.9258 589.07$ 107,685.23$

WMAC vs WMEC 50.28% 50.45% 37.37% 9.33% -34.08% -25.74% -31.18% -102.54% 10.84%

Excluding Outlying Companies

WMEC w/o CRM 37,415.35$ 20.8646% 3.5585% 6.5216% 6.2451% 3.8319 1.3444 22,040.83-$ 59,456.18$

WMAC w/o AAPL 57,201.06$ 31.9330% 4.9941% 6.6773% 3.7679% 2.9070 0.9089 793.01$ 56,408.06$

WMAC vs WMEC 52.88% 53.05% 40.34% 2.39% -39.67% -24.14% -32.39% -103.60% -5.13%


54

Appendix 2 - Detailed Calculations for WMEC Group of Companies

WMEC Group Total Average Beta 1.3453

Date

Market Value of

the investment

Total Dividends

received

Captial gain year




V(t) TD CG R R% required return required capita l ga inexcess return


3-Jan-07 189,316.31$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 222,634.26$ 2,356.32$ 33,317.94$ 35,674.26$ 18.8437% 1.1884 6.6488% 4.3620% 7.4384% 14,082.03$ 21,592.23$

31-Dec-08 133,418.44$ 3,358.28$ 89,215.82-$ 85,857.53-$ -38.5644% 0.6144 -40.8947% 1.3713% -55.4875% 123,534.26-$ 37,676.72$

31-Dec-09 178,276.70$ 2,993.07$ 44,858.26$ 47,851.33$ 35.8656% 1.3587 24.8028% 0.1598% 33.3111% 44,443.20$ 3,408.13$

31-Dec-10 226,356.47$ 3,230.19$ 48,079.77$ 51,309.96$ 28.7811% 1.2878 10.8429% 0.1400% 14.5383% 25,918.32$ 25,391.64$

30-Dec-11 199,279.01$ 3,856.19$ 27,077.45-$ 23,221.26-$ -10.2587% 0.8974 -6.1149% 0.0600% -8.2468% 18,667.21-$ 4,554.05-$

31-Dec-12 243,128.33$ 4,381.59$ 43,849.32$ 48,230.91$ 24.2027% 1.2420 12.9260% 0.0876% 17.3586% 34,592.07$ 13,638.84$

27.3% 20,175.64$ Total Return 73,987.66$ sum R 23,165.86-$ 97,153.52$

Total Percentage

return 39.0815% Total return / initial investment 51.32% 519.4%

root 1.4239


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 18.8437% 9.8117% 9.0321% 0.8158%

31-Dec-08 -38.5644% 9.8117% -48.3761% 23.4024%

31-Dec-09 35.8656% 9.8117% 26.0539% 6.7881%

31-Dec-10 28.7811% 9.8117% 18.9694% 3.5984%

30-Dec-11 -10.2587% 9.8117% -20.0704% 4.0282%

31-Dec-12 24.2027% 9.8117% 14.3910% 2.0710%

Sum 58.8700% 40.7039%





WMEC without CRM Average Beta 1.3444

Date

Market Value of

the investment

Total Dividends

received

Captial gain year






3-Jan-07 179,324.92$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 205,269.13$ 2,356.32$ 25,944.20$ 28,300.52$ 15.7817% 1.1578 6.6488% 4.3620% 7.4365% 13,335.48$ 14,965.05$

31-Dec-08 124,551.67$ 3,358.28$ 80,717.46-$ 77,359.17-$ -37.6867% 0.6231 -40.8947% 1.3713% -55.4529% 113,827.74-$ 36,468.57$

31-Dec-09 157,842.41$ 2,993.07$ 33,290.74$ 36,283.81$ 29.1315% 1.2913 24.8028% 0.1598% 33.2910% 41,464.45$ 5,180.64-$

31-Dec-10 189,792.47$ 3,230.19$ 31,950.06$ 35,180.25$ 22.2882% 1.2229 10.8429% 0.1400% 14.5295% 22,933.70$ 12,246.55$

30-Dec-11 171,174.59$ 3,856.19$ 18,617.87-$ 14,761.68-$ -7.7778% 0.9222 -6.1149% 0.0600% -8.2418% 15,642.25-$ 880.57$

31-Dec-12 196,564.63$ 4,381.59$ 25,390.04$ 29,771.63$ 17.3926% 1.1739 12.9260% 0.0876% 17.3481% 29,695.54$ 76.09$

53.9% 20,175.64$ Total Return 37,415.35$ sum R 22,040.83-$ 59,456.18$

Total Percentage

return 20.8646% Total return / initial investment 33.2% 369.8%

root 1.2334


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 15.7817% 6.5216% 9.2601% 0.8575%

31-Dec-08 -37.6867% 6.5216% -44.2083% 19.5437%

31-Dec-09 29.1315% 6.5216% 22.6100% 5.1121%

31-Dec-10 22.2882% 6.5216% 15.7666% 2.4859%

30-Dec-11 -7.7778% 6.5216% -14.2994% 2.0447%

31-Dec-12 17.3926% 6.5216% 10.8710% 1.1818%

Sum 39.1295% 31.2257%






55

Date Open High Low Close Volume Adj Close Dividend STAN.L 1.55 beta coefficient

31/12/2012 1564 1574.74 1555.5 1573.5 803100 1573.5 78.48

30/12/2011 1418.5 1420.05 1399.5 1409 898300 1361.64 71.4

31/12/2010 1755.5 1758 1725.5 1725.5 1146200 1594.15 68.15

31/12/2009 1572.5 1575.5 1554.5 1575 703200 1399.25 63.55

31/12/2008 820.5 875.5 820.5 875 1076600 742.47 80.9

31/12/2007 1844 1850 1824 1844 756400 1537.61

01/01/2007 1492 1492 1492 1492 0 1212.98

Purchase price 19.69 1.32 GBP : USD

No. of shares 507.00 10,000.00

Initial investment 9,985.06$

Date

Dividends

paid during

year

Stock price

at year end

Market Value

of the

investment

Total

Dividends

received

Captial gain

year to year

Total dollar

return

Percentage return

year to year NYA Risk free CAPM k CAPM k

DP SP V(t) TD CG R R% required return required capital gainexcess return


1-Jan-07 - 19.69 9,985.06 - - - 0.0000% 1.0000 0.0000%

31-Dec-07 - 24.34 12,340.79 - 2,355.72 2,355.72 23.5925% 1.2359 6.6488% 4.3620% 7.9066% 789.48$ 1,566.25$

31-Dec-08 1.07 11.55 5,855.85 541.42 6,484.94- 5,943.52- -48.1616% 0.5184 -40.8947% 1.3713% -64.1409% 7,915.50-$ 1,971.97$

31-Dec-09 0.84 20.79 10,540.53 425.30 4,684.68 5,109.98 87.2629% 1.8726 24.8028% 0.1598% 38.3565% 2,246.10$ 2,863.88$

31-Dec-10 0.90 22.78 11,547.74 456.09 1,007.21 1,463.29 13.8825% 1.1388 10.8429% 0.1400% 16.7295% 1,763.38$ 300.09-$

30-Dec-11 0.94 18.60 9,429.59 477.84 2,118.14- 1,640.31- -14.2046% 0.8580 -6.1149% 0.0600% -9.5110% 1,098.31-$ 542.00-$

31-Dec-12 1.04 20.77 10,530.49 525.22 1,100.90 1,626.12 17.2449% 1.1724 12.9260% 0.0876% 19.9871% 1,884.70$ 258.58-$

Total Return 2,971.29 sum R 2,330.15-$ 5,301.44$

Total

Percentage

return 29.7574% Total return / initial investment 327.5%

root 1.3744

product of series

of (R% +1)'s


Date

Percentage

return year

to year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 23.5925% 13.2694% 10.3231% 1.0657%

31-Dec-08 -48.1616% 13.2694% -61.4310% 37.7377%

31-Dec-09 87.2629% 13.2694% 73.9934% 54.7503%

31-Dec-10 13.8825% 13.2694% 0.6131% 0.0038%

30-Dec-11 -14.2046% 13.2694% -27.4740% 7.5482%

31-Dec-12 17.2449% 13.2694% 3.9754% 0.1580%

Sum 79.6166% 101.2637%





Date Open High Low Close Volume Adj Close Dividend TGT 0.94 beta coefficient

31/12/2012 58.5 59.2 58.3 59.17 3926700 59.17 2.28

30/12/2011 58.73 59.62 58.54 58.57 3477200 58.57 2.08

31/12/2010 59.07 59.31 58.49 58.93 3724100 58.93 1.88

31/12/2009 59.47 59.54 58.68 59.21 4671500 59.21 1.8

31/12/2008 59.56 59.82 59.45 59.54 1714400 59.54 1.8

31/12/2007 60.13 60.25 59.41 59.6 8667800 59.6 1.68

03/01/2007 60.7 61.03 59.86 60.36 8178600 60.36


No. of shares 165 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return


year NYA Risk free CAPM k CAPM k

DP SP V(t) TD CG R R% required return required capita l ga inexcess return


3-Jan-07 -$ 60.36$ 9,959.40$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.68$ 59.60$ 9,834.00$ 277.20$ 125.40-$ 151.80$ 1.5242% 1.0152 6.6488% 4.3620% 6.5116% 648.51$ 496.71-$

31-Dec-08 1.80$ 59.54$ 9,824.10$ 297.00$ 9.90-$ 287.10$ 2.9195% 1.0292 -40.8947% 1.3713% -38.3587% 3,772.19-$ 4,059.29$

31-Dec-09 1.80$ 59.21$ 9,769.65$ 297.00$ 54.45-$ 242.55$ 2.4689% 1.0247 24.8028% 0.1598% 23.3242% 2,291.40$ 2,048.85-$

31-Dec-10 1.88$ 58.93$ 9,723.45$ 310.20$ 46.20-$ 264.00$ 2.7022% 1.0270 10.8429% 0.1400% 10.2008% 996.58$ 732.58-$

30-Dec-11 2.08$ 58.57$ 9,664.05$ 343.20$ 59.40-$ 283.80$ 2.9187% 1.0292 -6.1149% 0.0600% -5.7444% 558.55-$ 842.35$

31-Dec-12 2.28$ 59.17$ 9,763.05$ 376.20$ 99.00$ 475.20$ 4.9172% 1.0492 12.9260% 0.0876% 12.1557% 1,174.73$ 699.53-$

Tota l Return 1,704.45$ sum R 780.47$ 923.98$

Tota l Percentage


root 1.1874


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 1.5242% 2.9085% -1.3843% 0.0192%

31-Dec-08 2.9195% 2.9085% 0.0110% 0.0000%

31-Dec-09 2.4689% 2.9085% -0.4395% 0.0019%

31-Dec-10 2.7022% 2.9085% -0.2062% 0.0004%

30-Dec-11 2.9187% 2.9085% 0.0103% 0.0000%

31-Dec-12 4.9172% 2.9085% 2.0087% 0.0404%

Sum 17.4507% 0.0619%






56

Open High Low Close Volume Adj Close Dividend AFL 1.85 beta coefficient

52.28 53.13 51.86 53.12 2614400 53.12 1.34

43.03 43.7 43.01 43.26 1897400 42.03 1.23

56.08 56.61 55.8 56.43 1352900 53.4 1.17

47.01 47.15 46.24 46.25 1446300 42.76 1.12

45.5 46.2 45.04 45.84 2789400 40.94 0.96

62.41 63.1 62.3 62.63 1279900 54.96 0.8

46.02 46.7 46 46.25 2705400 39.98

46.25$

216 10,000.00$

9,990.00$

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





-$ 46.25$ 9,990.00$ -$ -$ -$ 0.0000% 1.0000 0.0000%

0.80$ 62.63$ 13,528.08$ 172.80$ 3,538.08$ 3,710.88$ 37.1459% 1.3715 6.6488% 4.3620% 8.5926% 858.40$ 2,852.48$

0.96$ 45.84$ 9,901.44$ 207.36$ 3,626.64-$ 3,419.28-$ -25.2754% 0.7472 -40.8947% 1.3713% -76.8207% 10,392.37-$ 6,973.09$

1.12$ 46.25$ 9,990.00$ 241.92$ 88.56$ 330.48$ 3.3377% 1.0334 24.8028% 0.1598% 45.7494% 4,529.85$ 4,199.37-$

1.17$ 56.43$ 12,188.88$ 252.72$ 2,198.88$ 2,451.60$ 24.5405% 1.2454 10.8429% 0.1400% 19.9404% 1,992.05$ 459.55$

1.23$ 43.26$ 9,344.16$ 265.68$ 2,844.72-$ 2,579.04-$ -21.1590% 0.7884 -6.1149% 0.0600% -11.3635% 1,385.08-$ 1,193.96-$

1.34$ 53.12$ 11,473.92$ 289.44$ 2,129.76$ 2,419.20$ 25.8900% 1.2589 12.9260% 0.0876% 23.8386% 2,227.52$ 191.68$

Tota l Return 2,913.84$ sum R 2,169.64-$ 5,083.48$

Tota l Percentage


root 1.3091


(R% +1)'s


Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

37.1459% 7.4133% 29.7327% 8.8403%

-25.2754% 7.4133% -32.6887% 10.6855%

3.3377% 7.4133% -4.0756% 0.1661%

24.5405% 7.4133% 17.1272% 2.9334%

-21.1590% 7.4133% -28.5723% 8.1637%

25.8900% 7.4133% 18.4767% 3.4139%

44.4798% 34.2030%

7.4133% sum / 6

6.8406% sum of squares / n-1

26.1545% sqrt of variance

3.5281 variance / arithemtic mean

Date Open High Low Close Volume Adj Close Dividend AXP 1.82 beta coefficient

31/12/2012 56.47 57.49 56.24 57.48 5604600 57.28 0.8

30/12/2011 47.65 47.69 47.16 47.17 3333000 46.35 0.72

31/12/2010 42.51 42.97 42.4 42.92 3464000 41.51 0.72

31/12/2009 40.9 41.08 40.49 40.52 4030500 38.49 0.72

31/12/2008 17.97 18.75 17.91 18.55 9625600 17.02 0.72

31/12/2007 50.85 52.57 50.62 52.02 8380600 46.94 0.6

03/01/2007 61.18 61.9 60.05 60.36 6142500 54.05


No. of shares 165 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 60.36$ 9,959.40$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.60$ 52.02$ 8,583.30$ 99.00$ 1,376.10-$ 1,277.10-$ -12.8231% 0.8718 6.6488% 4.3620% 8.5240% 848.94$ 2,126.04-$

31-Dec-08 0.72$ 18.55$ 3,060.75$ 118.80$ 5,522.55-$ 5,403.75-$ -62.9566% 0.3704 -40.8947% 1.3713% -75.5527% 6,484.92-$ 1,081.17$

31-Dec-09 0.72$ 40.52$ 6,685.80$ 118.80$ 3,625.05$ 3,743.85$ 122.3181% 2.2232 24.8028% 0.1598% 45.0101% 1,377.65$ 2,366.20$

31-Dec-10 0.72$ 42.92$ 7,081.80$ 118.80$ 396.00$ 514.80$ 7.6999% 1.0770 10.8429% 0.1400% 19.6193% 1,311.71$ 796.91-$

30-Dec-11 0.72$ 47.17$ 7,783.05$ 118.80$ 701.25$ 820.05$ 11.5797% 1.1158 -6.1149% 0.0600% -11.1782% 791.62-$ 1,611.67$

31-Dec-12 0.80$ 57.48$ 9,484.20$ 132.00$ 1,701.15$ 1,833.15$ 23.5531% 1.2355 12.9260% 0.0876% 23.4535% 1,825.39$ 7.76$

Tota l Return 231.00$ sum R 1,912.85-$ 2,143.85$

Tota l Percentage


root 1.0660


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -12.8231% 14.8952% -27.7183% 7.6830%

31-Dec-08 -62.9566% 14.8952% -77.8517% 60.6089%

31-Dec-09 122.3181% 14.8952% 107.4229% 115.3967%

31-Dec-10 7.6999% 14.8952% -7.1953% 0.5177%

30-Dec-11 11.5797% 14.8952% -3.3155% 0.1099%

31-Dec-12 23.5531% 14.8952% 8.6579% 0.7496%

Sum 89.3711% 185.0659%






57

Date Open High Low Close Volume Adj Close Dividend BDX 0.65 beta coefficient

31/12/2012 77.41 78.23 76.76 78.19 758900 78.19 1.845

30/12/2011 74.68 75.39 74.55 74.72 1033700 72.91 1.68

31/12/2010 84.99 85.27 84.43 84.52 645100 80.73 1.52

31/12/2009 79.48 79.66 78.86 78.86 839100 73.81 1.36

31/12/2008 67.72 68.99 67.37 68.39 1258500 62.76 1.185

31/12/2007 84.79 85.16 83.58 83.58 1040500 75.55 1.02

03/01/2007 70.54 71.11 70.11 70.43 1490900 62.83


No. of shares 141 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 70.43$ 9,930.63$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.02$ 83.58$ 11,784.78$ 143.82$ 1,854.15$ 1,997.97$ 20.1193% 1.2012 6.6488% 4.3620% 5.8484% 580.78$ 1,417.19$

31-Dec-08 1.19$ 68.39$ 9,642.99$ 167.09$ 2,141.79-$ 1,974.71-$ -16.7564% 0.8324 -40.8947% 1.3713% -26.1016% 3,076.01-$ 1,101.31$

31-Dec-09 1.36$ 78.86$ 11,119.26$ 191.76$ 1,476.27$ 1,668.03$ 17.2979% 1.1730 24.8028% 0.1598% 16.1777% 1,560.02$ 108.01$

31-Dec-10 1.52$ 84.52$ 11,917.32$ 214.32$ 798.06$ 1,012.38$ 9.1047% 1.0910 10.8429% 0.1400% 7.0969% 789.12$ 223.26$

30-Dec-11 1.68$ 74.72$ 10,535.52$ 236.88$ 1,381.80-$ 1,144.92-$ -9.6072% 0.9039 -6.1149% 0.0600% -3.9537% 471.17-$ 673.75-$

31-Dec-12 1.85$ 78.19$ 11,024.79$ 260.15$ 489.27$ 749.41$ 7.1132% 1.0711 12.9260% 0.0876% 8.4326% 888.41$ 139.00-$

Tota l Return 2,308.17$ sum R 271.15$ 2,037.02$

Tota l Percentage


root 1.2390


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 20.1193% 4.5452% 15.5740% 2.4255%

31-Dec-08 -16.7564% 4.5452% -21.3016% 4.5376%

31-Dec-09 17.2979% 4.5452% 12.7526% 1.6263%

31-Dec-10 9.1047% 4.5452% 4.5595% 0.2079%

30-Dec-11 -9.6072% 4.5452% -14.1524% 2.0029%

31-Dec-12 7.1132% 4.5452% 2.5680% 0.0659%

Sum 27.2715% 10.8661%





Date Open High Low Close Volume Adj Close Dividend DE 1.57 beta coefficient

31/12/2012 84.52 86.5 84.3 86.42 2093700 86.42 1.84

30/12/2011 77.39 78.22 77.35 77.35 1481200 75.62 1.58

31/12/2010 83.25 83.29 82.75 83.05 1187900 79.58 1.23

31/12/2009 55.13 55.19 54.01 54.09 1864700 50.9 1.12

31/12/2008 37.69 38.94 37.28 38.32 4512500 35.14 1.09

31/12/2007 92.01 93.74 91.5 93.12 3426800 83.78 1.63

03/01/2007 95.69 96.5 92.96 93.48 3943000 41.47


No. of shares 106 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 93.48$ 9,908.88$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.63$ 93.12$ 9,870.72$ 172.78$ 38.16-$ 134.62$ 1.3586% 1.0136 6.6488% 4.3620% 7.9523% 787.98$ 653.36-$

31-Dec-08 1.09$ 38.32$ 4,061.92$ 115.54$ 5,808.80-$ 5,693.26-$ -57.6783% 0.4232 -40.8947% 1.3713% -64.9863% 6,414.61-$ 721.35$

31-Dec-09 1.12$ 54.09$ 5,733.54$ 118.72$ 1,671.62$ 1,790.34$ 44.0762% 1.4408 24.8028% 0.1598% 38.8493% 1,578.03$ 212.31$

31-Dec-10 1.23$ 83.05$ 8,803.30$ 130.38$ 3,069.76$ 3,200.14$ 55.8144% 1.5581 10.8429% 0.1400% 16.9436% 971.47$ 2,228.67$

30-Dec-11 1.58$ 77.35$ 8,199.10$ 167.48$ 604.20-$ 436.72-$ -4.9609% 0.9504 -6.1149% 0.0600% -9.6345% 848.16-$ 411.44$

31-Dec-12 1.84$ 86.42$ 9,160.52$ 195.04$ 961.42$ 1,156.46$ 14.1047% 1.1410 12.9260% 0.0876% 20.2439% 1,659.82$ 503.36-$

Tota l Return 151.58$ sum R 2,265.47-$ 2,417.05$

Tota l Percentage


root 1.0443


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 1.3586% 8.7858% -7.4272% 0.5516%

31-Dec-08 -57.6783% 8.7858% -66.4641% 44.1747%

31-Dec-09 44.0762% 8.7858% 35.2904% 12.4541%

31-Dec-10 55.8144% 8.7858% 47.0286% 22.1169%

30-Dec-11 -4.9609% 8.7858% -13.7467% 1.8897%

31-Dec-12 14.1047% 8.7858% 5.3189% 0.2829%

Sum 52.7148% 81.4700%






58

Date Open High Low Close Volume Adj Close Dividend GE 1.63 beta coefficient

31/12/2012 20.29 21 20.26 20.99 58785000 20.99 0.7

30/12/2011 18.03 18.08 17.88 17.91 31407800 17.31 0.61

31/12/2010 18.15 18.35 18.13 18.29 27074100 17.08 0.46

31/12/2009 15.27 15.34 15.13 15.13 44531600 13.74 0.61

31/12/2008 15.82 16.34 15.77 16.2 60298400 14.01 1.24

31/12/2007 37.3 37.3 36.96 37.07 24131400 30.41 1.15

03/01/2007 37.41 38.15 37.38 37.97 43222800 30.22


No. of shares 263 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 37.97$ 9,986.11$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.15$ 37.07$ 9,749.41$ 302.45$ 236.70-$ 65.75$ 0.6584% 1.0066 6.6488% 4.3620% 8.0895% 807.83$ 742.08-$

31-Dec-08 1.24$ 16.20$ 4,260.60$ 326.12$ 5,488.81-$ 5,162.69-$ -52.9539% 0.4705 -40.8947% 1.3713% -67.5222% 6,583.02-$ 1,420.33$

31-Dec-09 0.61$ 15.13$ 3,979.19$ 160.43$ 281.41-$ 120.98-$ -2.8395% 0.9716 24.8028% 0.1598% 40.3279% 1,718.21$ 1,839.19-$

31-Dec-10 0.46$ 18.29$ 4,810.27$ 120.98$ 831.08$ 952.06$ 23.9260% 1.2393 10.8429% 0.1400% 17.5858% 699.77$ 252.29$

30-Dec-11 0.61$ 17.91$ 4,710.33$ 160.43$ 99.94-$ 60.49$ 1.2575% 1.0126 -6.1149% 0.0600% -10.0050% 481.27-$ 541.76$

31-Dec-12 0.70$ 20.99$ 5,520.37$ 184.10$ 810.04$ 994.14$ 21.1055% 1.2111 12.9260% 0.0876% 21.0142% 989.84$ 4.30$

Tota l Return 3,211.23-$ sum R 2,848.64-$ 362.59-$

Tota l Percentage

return -32.1570% Total return / initial investment 87.3%

root 0.6992


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 0.6584% -1.4743% 2.1327% 0.0455%

31-Dec-08 -52.9539% -1.4743% -51.4795% 26.5014%

31-Dec-09 -2.8395% -1.4743% -1.3652% 0.0186%

31-Dec-10 23.9260% -1.4743% 25.4003% 6.4518%

30-Dec-11 1.2575% -1.4743% 2.7318% 0.0746%

31-Dec-12 21.1055% -1.4743% 22.5799% 5.0985%

Sum -8.8459% 38.1904%





Date Open High Low Close Volume Adj Close Dividend UPS 0.89 beta coefficient

31/12/2012 72.8 73.83 72.58 73.73 4700000 73.73 2.28

30/12/2011 73.55 73.75 73.11 73.19 1774600 70.99 2.08

31/12/2010 72.65 73.06 72.5 72.58 2054500 68.37 1.88

31/12/2009 57.99 58.02 57.31 57.37 2357500 52.48 1.8

31/12/2008 54.19 55.65 54.19 55.16 3977400 48.7 1.8

31/12/2007 71.19 71.33 70.61 70.72 3319200 60.68 1.68

03/01/2007 75.45 75.98 74.4 74.97 3955300 62.87


No. of shares 133 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 74.97$ 9,971.01$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.68$ 70.72$ 9,405.76$ 223.44$ 565.25-$ 341.81-$ -3.4280% 0.9657 6.6488% 4.3620% 6.3972% 637.87$ 979.68-$

31-Dec-08 1.80$ 55.16$ 7,336.28$ 239.40$ 2,069.48-$ 1,830.08-$ -19.4570% 0.8054 -40.8947% 1.3713% -36.2454% 3,409.15-$ 1,579.07$

31-Dec-09 1.80$ 57.37$ 7,630.21$ 239.40$ 293.93$ 533.33$ 7.2698% 1.0727 24.8028% 0.1598% 22.0921% 1,620.74$ 1,087.41-$

31-Dec-10 1.88$ 72.58$ 9,653.14$ 250.04$ 2,022.93$ 2,272.97$ 29.7891% 1.2979 10.8429% 0.1400% 9.6656% 737.51$ 1,535.46$

30-Dec-11 2.08$ 73.19$ 9,734.27$ 276.64$ 81.13$ 357.77$ 3.7063% 1.0371 -6.1149% 0.0600% -5.4356% 524.71-$ 882.48$

31-Dec-12 2.28$ 73.73$ 9,806.09$ 303.24$ 71.82$ 375.06$ 3.8530% 1.0385 12.9260% 0.0876% 11.5138% 1,120.78$ 745.72-$


Tota l Percentage


root 1.1663


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -3.4280% 3.6222% -7.0502% 0.4971%

31-Dec-08 -19.4570% 3.6222% -23.0792% 5.3265%

31-Dec-09 7.2698% 3.6222% 3.6476% 0.1330%

31-Dec-10 29.7891% 3.6222% 26.1669% 6.8471%

30-Dec-11 3.7063% 3.6222% 0.0841% 0.0001%

31-Dec-12 3.8530% 3.6222% 0.2308% 0.0005%

Sum 21.7330% 12.8043%






59

Date Open High Low Close Volume Adj Close Dividend IP 2.26 beta coefficient

31/12/2012 38.74 39.88 38.65 39.84 3528600 39.84 1.125

30/12/2011 29.74 29.8 29.5 29.6 2328900 28.61 0.975

31/12/2010 27.12 27.5 27.05 27.24 2539900 25.44 0.4

31/12/2009 27.19 27.41 26.78 26.78 1484800 24.59 0.325

31/12/2008 11.63 11.98 11.57 11.8 5132700 10.44 1

31/12/2007 32.41 32.59 32.18 32.38 2071400 27.35 1

03/01/2007 34.23 34.86 34.23 34.65 2796000 28.46


No. of shares 288 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 34.65$ 9,979.20$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.00$ 32.38$ 9,325.44$ 288.00$ 653.76-$ 365.76-$ -3.6652% 0.9633 6.6488% 4.3620% 9.5302% 951.04$ 1,316.80-$

31-Dec-08 1.00$ 11.80$ 3,398.40$ 288.00$ 5,927.04-$ 5,639.04-$ -60.4694% 0.3953 -40.8947% 1.3713% -94.1498% 8,779.88-$ 3,140.84$

31-Dec-09 0.33$ 26.78$ 7,712.64$ 93.60$ 4,314.24$ 4,407.84$ 129.7034% 2.2970 24.8028% 0.1598% 55.8530% 1,898.11$ 2,509.73$

31-Dec-10 0.40$ 27.24$ 7,845.12$ 115.20$ 132.48$ 247.68$ 3.2114% 1.0321 10.8429% 0.1400% 24.3286% 1,876.38$ 1,628.70-$

30-Dec-11 0.98$ 29.60$ 8,524.80$ 280.80$ 679.68$ 960.48$ 12.2430% 1.1224 -6.1149% 0.0600% -13.8952% 1,090.09-$ 2,050.57$

31-Dec-12 1.13$ 39.84$ 11,473.92$ 324.00$ 2,949.12$ 3,273.12$ 38.3953% 1.3840 12.9260% 0.0876% 29.1024% 2,480.92$ 792.20$


Tota l Percentage


root 1.4025


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -3.6652% 19.9031% -23.5683% 5.5546%

31-Dec-08 -60.4694% 19.9031% -80.3725% 64.5974%

31-Dec-09 129.7034% 19.9031% 109.8003% 120.5611%

31-Dec-10 3.2114% 19.9031% -16.6917% 2.7861%

30-Dec-11 12.2430% 19.9031% -7.6600% 0.5868%

31-Dec-12 38.3953% 19.9031% 18.4922% 3.4196%

Sum 119.4184% 197.5056%





Open High Low Close Volume Adj Close Dividend SBUX 1.18 beta coefficient

77.41 78.23 76.76 78.19 758900 78.19 0.72

74.68 75.39 74.55 74.72 1033700 72.91 0.56

84.99 85.27 84.43 84.52 645100 80.73 0.36

79.48 79.66 78.86 78.86 839100 73.81 0

67.72 68.99 67.37 68.39 1258500 62.76 0

84.79 85.16 83.58 83.58 1040500 75.55 0

70.54 71.11 70.11 70.43 1490900 62.83 0

70.43$

141 10,000.00$

9,930.63$

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





-$ 70.43$ 9,930.63$ -$ -$ -$ 0.0000% 1.0000 0.0000%

-$ 83.58$ 11,784.78$ -$ 1,854.15$ 1,854.15$ 18.6710% 1.1867 6.6488% 4.3620% 7.0604% 701.15$ 1,153.00$

-$ 68.39$ 9,642.99$ -$ 2,141.79-$ 2,141.79-$ -18.1742% 0.8183 -40.8947% 1.3713% -48.5025% 5,715.92-$ 3,574.13$

-$ 78.86$ 11,119.26$ -$ 1,476.27$ 1,476.27$ 15.3093% 1.1531 24.8028% 0.1598% 29.2386% 2,819.47$ 1,343.20-$

0.36$ 84.52$ 11,917.32$ 50.76$ 798.06$ 848.82$ 7.6338% 1.0763 10.8429% 0.1400% 12.7695% 1,419.87$ 571.05-$

0.56$ 74.72$ 10,535.52$ 78.96$ 1,381.80-$ 1,302.84-$ -10.9323% 0.8907 -6.1149% 0.0600% -7.2263% 861.19-$ 441.65-$

0.72$ 78.19$ 11,024.79$ 101.52$ 489.27$ 590.79$ 5.6076% 1.0561 12.9260% 0.0876% 15.2369% 1,605.29$ 1,014.50-$

Tota l Return 1,325.40$ sum R 31.33-$ 1,356.73$

Tota l Percentage


root 1.1336


(R% +1)'s


Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

18.6710% 3.0192% 15.6518% 2.4498%

-18.1742% 3.0192% -21.1934% 4.4916%

15.3093% 3.0192% 12.2901% 1.5105%

7.6338% 3.0192% 4.6146% 0.2129%

-10.9323% 3.0192% -13.9515% 1.9464%

5.6076% 3.0192% 2.5884% 0.0670%

18.1151% 10.6782%

3.0192% sum / 6





60

Date Open High Low Close Volume Adj Close Dividend GPS 1.28 beta coefficient

31/12/2012 30.44 31.06 30.23 31.04 4559500 31.04

30/12/2011 18.7 18.74 18.51 18.55 3046800 18.24

31/12/2010 22.39 22.51 22.1 22.14 5395300 21.16

31/12/2009 21.32 21.32 20.94 20.95 2893100 19.65

31/12/2008 13.19 13.55 13 13.39 3581300 12.3

31/12/2007 21.26 21.56 21.1 21.28 6626300 19.17

03/01/2007 19.82 20.1 19.2 19.31 8802600 17.18


No. of shares 517 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 19.31$ 9,983.27$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 21.28$ 11,001.76$ -$ 1,018.49$ 1,018.49$ 10.2020% 1.1020 6.6488% 4.3620% 7.2891% 727.69$ 290.80$

31-Dec-08 -$ 13.39$ 6,922.63$ -$ 4,079.13-$ 4,079.13-$ -37.0771% 0.6292 -40.8947% 1.3713% -52.7291% 5,801.13-$ 1,722.00$

31-Dec-09 -$ 20.95$ 10,831.15$ -$ 3,908.52$ 3,908.52$ 56.4600% 1.5646 24.8028% 0.1598% 31.7029% 2,194.67$ 1,713.85$

31-Dec-10 -$ 22.14$ 11,446.38$ -$ 615.23$ 615.23$ 5.6802% 1.0568 10.8429% 0.1400% 13.8397% 1,499.00$ 883.77-$

30-Dec-11 -$ 18.55$ 9,590.35$ -$ 1,856.03-$ 1,856.03-$ -16.2150% 0.8379 -6.1149% 0.0600% -7.8438% 897.83-$ 958.20-$

31-Dec-12 -$ 31.04$ 16,047.68$ -$ 6,457.33$ 6,457.33$ 67.3315% 1.6733 12.9260% 0.0876% 16.5207% 1,584.40$ 4,872.93$


Tota l Percentage


root 1.6075


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 10.2020% 14.3969% -4.1950% 0.1760%

31-Dec-08 -37.0771% 14.3969% -51.4740% 26.4957%

31-Dec-09 56.4600% 14.3969% 42.0631% 17.6930%

31-Dec-10 5.6802% 14.3969% -8.7168% 0.7598%

30-Dec-11 -16.2150% 14.3969% -30.6119% 9.3709%

31-Dec-12 67.3315% 14.3969% 52.9346% 28.0207%

Sum 86.3817% 82.5162%





Date Open High Low Close Volume Adj Close Dividend JCI 1.81 beta coefficient

31/12/2012 29.88 30.74 29.87 30.67 5596400 30.67 0.73

30/12/2011 31.06 31.4 31.02 31.26 2470400 30.47 0.66

31/12/2010 38.26 38.69 38.02 38.2 1930600 36.52 0.55

31/12/2009 27.93 27.93 27.23 27.24 2734800 25.58 0.52

31/12/2008 17.95 18.5 17.9 18.16 3295500 16.54 0.52

31/12/2007 36.61 36.61 35.97 36.04 1473500 32.21 0.46 STOCK SPLIT 3:1

03/01/2007 86.3 87.98 85.28 85.88 4141800 25.26


No. of shares 116 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 85.88$ 9,962.08$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.46$ 36.04$ 12,541.92$ 53.36$ 2,579.84$ 2,633.20$ 26.4322% 1.2643 6.6488% 4.3620% 8.5011% 846.89$ 1,786.31$

31-Dec-08 0.52$ 18.16$ 6,319.68$ 180.96$ 6,222.24-$ 6,041.28-$ -48.1687% 0.5183 -40.8947% 1.3713% -75.1301% 9,422.76-$ 3,381.48$

31-Dec-09 0.52$ 27.24$ 9,479.52$ 180.96$ 3,159.84$ 3,340.80$ 52.8634% 1.5286 24.8028% 0.1598% 44.7637% 2,828.92$ 511.88$

31-Dec-10 0.55$ 38.20$ 13,293.60$ 191.40$ 3,814.08$ 4,005.48$ 42.2540% 1.4225 10.8429% 0.1400% 19.5123% 1,849.67$ 2,155.81$

30-Dec-11 0.66$ 31.26$ 10,878.48$ 229.68$ 2,415.12-$ 2,185.44-$ -16.4398% 0.8356 -6.1149% 0.0600% -11.1165% 1,477.78-$ 707.66-$

31-Dec-12 0.73$ 30.67$ 10,673.16$ 254.04$ 205.32-$ 48.72$ 0.4479% 1.0045 12.9260% 0.0876% 23.3251% 2,537.41$ 2,488.69-$


Tota l Percentage


root 1.1961


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 26.4322% 9.5648% 16.8674% 2.8451%

31-Dec-08 -48.1687% 9.5648% -57.7335% 33.3316%

31-Dec-09 52.8634% 9.5648% 43.2986% 18.7477%

31-Dec-10 42.2540% 9.5648% 32.6892% 10.6858%

30-Dec-11 -16.4398% 9.5648% -26.0046% 6.7624%

31-Dec-12 0.4479% 9.5648% -9.1170% 0.8312%

Sum 57.3891% 73.2038%






61

Date Open High Low Close Volume Adj Close Dividend ECL 0.67 beta coefficient

31/12/2012 70.66 71.91 70.33 71.9 888000 71.9 0.83

30/12/2011 57.55 58.13 57.46 57.81 1223500 57.08 0.725

31/12/2010 50.45 50.9 50.37 50.42 690800 49.1 0.64

31/12/2009 45.21 45.24 44.56 44.58 471900 42.83 0.575

31/12/2008 34.76 35.44 33.92 35.15 1754800 33.27 0.53

31/12/2007 52 52.02 51.13 51.21 538000 47.86 0.475

03/01/2007 45.2 45.37 44.28 44.5 1095500 41.16


No. of shares 224 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 44.50$ 9,968.00$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.48$ 51.21$ 11,471.04$ 106.40$ 1,503.04$ 1,609.44$ 16.1461% 1.1615 6.6488% 4.3620% 5.8941% 587.53$ 1,021.91$

31-Dec-08 0.53$ 35.15$ 7,873.60$ 118.72$ 3,597.44-$ 3,478.72-$ -30.3261% 0.6967 -40.8947% 1.3713% -26.9469% 3,091.09-$ 387.63-$

31-Dec-09 0.58$ 44.58$ 9,985.92$ 128.80$ 2,112.32$ 2,241.12$ 28.4637% 1.2846 24.8028% 0.1598% 16.6706% 1,312.58$ 928.54$

31-Dec-10 0.64$ 50.42$ 11,294.08$ 143.36$ 1,308.16$ 1,451.52$ 14.5357% 1.1454 10.8429% 0.1400% 7.3110% 730.07$ 721.45$

30-Dec-11 0.73$ 57.81$ 12,949.44$ 162.40$ 1,655.36$ 1,817.76$ 16.0948% 1.1609 -6.1149% 0.0600% -4.0772% 460.48-$ 2,278.24$

31-Dec-12 0.83$ 71.90$ 16,105.60$ 185.92$ 3,156.16$ 3,342.08$ 25.8087% 1.2581 12.9260% 0.0876% 8.6893% 1,125.22$ 2,216.86$


Tota l Percentage


root 1.7391


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 16.1461% 11.7871% 4.3589% 0.1900%

31-Dec-08 -30.3261% 11.7871% -42.1132% 17.7353%

31-Dec-09 28.4637% 11.7871% 16.6766% 2.7811%

31-Dec-10 14.5357% 11.7871% 2.7485% 0.0755%

30-Dec-11 16.0948% 11.7871% 4.3077% 0.1856%

31-Dec-12 25.8087% 11.7871% 14.0215% 1.9660%

Sum 70.7228% 22.9335%





Date Open High Low Close Volume Adj Close Dividend TXN 1.1 beta coefficient

31/12/2012 30.48 30.99 30.3 30.89 7153000 30.89 0.72

30/12/2011 29.27 29.44 29.1 29.11 3809800 28.41 0.69

31/12/2010 32.5 32.63 32.33 32.5 3312700 31.18 0.61

31/12/2009 25.95 26.27 25.94 26.06 8432700 24.54 0.45

31/12/2008 15.14 15.72 15.04 15.52 13453400 14.28 0.41

31/12/2007 33.37 33.82 33.18 33.4 6175700 30.23 0.3

03/01/2007 29.12 29.22 28.35 28.56 20786800 25.62


No. of shares 350 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 28.56$ 9,996.00$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.30$ 33.40$ 11,690.00$ 105.00$ 1,694.00$ 1,799.00$ 17.9972% 1.1800 6.6488% 4.3620% 6.8775% 687.47$ 1,111.53$

31-Dec-08 0.41$ 15.52$ 5,432.00$ 143.50$ 6,258.00-$ 6,114.50-$ -52.3054% 0.4769 -40.8947% 1.3713% -45.1212% 5,274.67-$ 839.83-$

31-Dec-09 0.45$ 26.06$ 9,121.00$ 157.50$ 3,689.00$ 3,846.50$ 70.8119% 1.7081 24.8028% 0.1598% 27.2671% 1,481.15$ 2,365.35$

31-Dec-10 0.61$ 32.50$ 11,375.00$ 213.50$ 2,254.00$ 2,467.50$ 27.0530% 1.2705 10.8429% 0.1400% 11.9132% 1,086.60$ 1,380.90$

30-Dec-11 0.69$ 29.11$ 10,188.50$ 241.50$ 1,186.50-$ 945.00-$ -8.3077% 0.9169 -6.1149% 0.0600% -6.7324% 765.81-$ 179.19-$

31-Dec-12 0.72$ 30.89$ 10,811.50$ 252.00$ 623.00$ 875.00$ 8.5881% 1.0859 12.9260% 0.0876% 14.2098% 1,447.77$ 572.77-$


Tota l Percentage


root 1.2161


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 17.9972% 10.6395% 7.3577% 0.5414%

31-Dec-08 -52.3054% 10.6395% -62.9449% 39.6206%

31-Dec-09 70.8119% 10.6395% 60.1723% 36.2071%

31-Dec-10 27.0530% 10.6395% 16.4134% 2.6940%

30-Dec-11 -8.3077% 10.6395% -18.9472% 3.5900%

31-Dec-12 8.5881% 10.6395% -2.0514% 0.0421%

Sum 63.8370% 82.6951%






62

Date Open High Low Close Volume Adj Close Dividend XRX 1.63 beta coefficient

31/12/2012 6.66 6.84 6.62 6.82 8524200 6.82 0.172

30/12/2011 7.95 8.02 7.88 7.96 8913800 7.78 0.172

31/12/2010 11.46 11.6 11.44 11.52 4986100 11.04 0.172

31/12/2009 8.61 8.66 8.44 8.46 9492400 7.97 0.172

31/12/2008 7.72 8.08 7.6 7.97 6183200 7.33 0.172

31/12/2007 16.32 16.33 16.1 16.19 3127400 14.66 0.043

03/01/2007 17 17.1 16.77 16.9 4011700 15.26


No. of shares 591 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 16.90$ 9,987.90$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.04$ 16.19$ 9,568.29$ 25.41$ 419.61-$ 394.20-$ -3.9467% 0.9605 6.6488% 4.3620% 8.0895% 807.97$ 1,202.17-$

31-Dec-08 0.17$ 7.97$ 4,710.27$ 101.65$ 4,858.02-$ 4,756.37-$ -49.7097% 0.5029 -40.8947% 1.3713% -67.5222% 6,460.72-$ 1,704.35$

31-Dec-09 0.17$ 8.46$ 4,999.86$ 101.65$ 289.59$ 391.24$ 8.3061% 1.0831 24.8028% 0.1598% 40.3279% 1,899.55$ 1,508.31-$

31-Dec-10 0.17$ 11.52$ 6,808.32$ 101.65$ 1,808.46$ 1,910.11$ 38.2033% 1.3820 10.8429% 0.1400% 17.5858% 879.26$ 1,030.85$

30-Dec-11 0.17$ 7.96$ 4,704.36$ 101.65$ 2,103.96-$ 2,002.31-$ -29.4097% 0.7059 -6.1149% 0.0600% -10.0050% 681.17-$ 1,321.13-$

31-Dec-12 0.17$ 6.82$ 4,030.62$ 101.65$ 673.74-$ 572.09-$ -12.1608% 0.8784 12.9260% 0.0876% 21.0142% 988.58$ 1,560.67-$

Tota l Return 5,423.61-$ sum R 2,566.52-$ 2,857.08-$

Tota l Percentage

return -54.3018% Total return / initial investment -11.3%

root 0.4483


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -3.9467% -8.1196% 4.1728% 0.1741%

31-Dec-08 -49.7097% -8.1196% -41.5901% 17.2974%

31-Dec-09 8.3061% -8.1196% 16.4257% 2.6980%

31-Dec-10 38.2033% -8.1196% 46.3229% 21.4581%

30-Dec-11 -29.4097% -8.1196% -21.2901% 4.5327%

31-Dec-12 -12.1608% -8.1196% -4.0412% 0.1633%

Sum -48.7175% 46.3237%





Date Open High Low Close Volume Adj Close Dividend FLR 1.39 beta coefficient

31/12/2012 57.23 59.03 56.84 58.74 1610600 58.74 0.64

30/12/2011 50.2 50.7 50.1 50.25 929800 49.65 0.5

31/12/2010 66.21 66.69 65.95 66.26 1008400 64.94 0.5

31/12/2009 45.14 45.54 44.89 45.04 1705000 43.67 0.5

31/12/2008 44.7 46.43 44.2 44.87 3546800 42.99 0.5 STOCK SPLIT 2:1

31/12/2007 145.59 148.42 144.61 145.72 1363200 69.27 0.4

03/01/2007 81.86 82.41 79.93 80.73 1398200 38.1


No. of shares 123 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 80.73$ 9,929.79$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.40$ 145.72$ 17,923.56$ 49.20$ 7,993.77$ 8,042.97$ 80.9984% 1.8100 6.6488% 4.3620% 7.5407% 748.77$ 7,294.20$

31-Dec-08 0.50$ 44.87$ 11,038.02$ 123.00$ 6,885.54-$ 6,762.54-$ -37.7299% 0.6227 -40.8947% 1.3713% -57.3784% 10,284.25-$ 3,521.71$

31-Dec-09 0.50$ 45.04$ 11,079.84$ 123.00$ 41.82$ 164.82$ 1.4932% 1.0149 24.8028% 0.1598% 34.4136% 3,798.58$ 3,633.76-$

31-Dec-10 0.50$ 66.26$ 16,299.96$ 123.00$ 5,220.12$ 5,343.12$ 48.2238% 1.4822 10.8429% 0.1400% 15.0171% 1,663.87$ 3,679.25$

30-Dec-11 0.50$ 50.25$ 12,361.50$ 123.00$ 3,938.46-$ 3,815.46-$ -23.4078% 0.7659 -6.1149% 0.0600% -8.5231% 1,389.26-$ 2,426.20-$

31-Dec-12 0.64$ 58.74$ 14,450.04$ 157.44$ 2,088.54$ 2,245.98$ 18.1692% 1.1817 12.9260% 0.0876% 17.9330% 2,216.78$ 29.20$


Tota l Percentage


root 1.5346


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 80.9984% 14.6245% 66.3739% 44.0550%

31-Dec-08 -37.7299% 14.6245% -52.3544% 27.4098%

31-Dec-09 1.4932% 14.6245% -13.1313% 1.7243%

31-Dec-10 48.2238% 14.6245% 33.5993% 11.2891%

30-Dec-11 -23.4078% 14.6245% -38.0323% 14.4645%

31-Dec-12 18.1692% 14.6245% 3.5447% 0.1256%

Sum 87.7469% 99.0684%






63

Date Open High Low Close Volume Adj Close Dividend PEP 0.46 beta coefficient

31/12/2012 67.78 68.45 67.39 68.43 5899600 68.43 2.128

30/12/2011 66.42 66.69 66.24 66.35 2632900 64.32 2.025

31/12/2010 65.05 65.55 65.03 65.33 2977400 61.39 1.89

31/12/2009 61.25 61.44 60.76 60.8 3316300 55.46 1.775

31/12/2008 55.03 55.57 54.61 54.77 5024400 48.39 1.65

31/12/2007 76.93 76.93 75.75 75.9 3707600 65.35 1.425

03/01/2007 62.7 63.35 62.45 62.72 6161600 52.9


No. of shares 159 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 62.72$ 9,972.48$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.43$ 75.90$ 12,068.10$ 226.58$ 2,095.62$ 2,322.20$ 23.2860% 1.2329 6.6488% 4.3620% 5.4139% 539.90$ 1,782.29$

31-Dec-08 1.65$ 54.77$ 8,708.43$ 262.35$ 3,359.67-$ 3,097.32-$ -25.6653% 0.7433 -40.8947% 1.3713% -18.0710% 2,180.83-$ 916.49-$

31-Dec-09 1.78$ 60.80$ 9,667.20$ 282.23$ 958.77$ 1,241.00$ 14.2505% 1.1425 24.8028% 0.1598% 11.4956% 1,001.08$ 239.91$

31-Dec-10 1.89$ 65.33$ 10,387.47$ 300.51$ 720.27$ 1,020.78$ 10.5592% 1.1056 10.8429% 0.1400% 5.0633% 489.48$ 531.30$

30-Dec-11 2.03$ 66.35$ 10,549.65$ 321.98$ 162.18$ 484.16$ 4.6610% 1.0466 -6.1149% 0.0600% -2.7805% 288.82-$ 772.97$

31-Dec-12 2.13$ 68.43$ 10,880.37$ 338.35$ 330.72$ 669.07$ 6.3421% 1.0634 12.9260% 0.0876% 5.9933% 632.27$ 36.80$


Tota l Percentage


root 1.2884


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 23.2860% 5.5722% 17.7138% 3.1378%

31-Dec-08 -25.6653% 5.5722% -31.2376% 9.7579%

31-Dec-09 14.2505% 5.5722% 8.6783% 0.7531%

31-Dec-10 10.5592% 5.5722% 4.9870% 0.2487%

30-Dec-11 4.6610% 5.5722% -0.9113% 0.0083%

31-Dec-12 6.3421% 5.5722% 0.7699% 0.0059%

Sum 33.4335% 13.9117%





Date Open High Low Close Volume Adj Close Dividend ETN 1.52 beta coefficient

31/12/2012 52.72 54.23 52.45 54.18 2619100 54.18 1.52

30/12/2011 43.79 43.98 43.5 43.53 1722500 42.13 1.02 STOCKSPLIT 2:1

31/12/2010 101.09 102.02 100.85 101.51 1432200 47.78 1.04

31/12/2009 64 64.05 63.59 63.62 1685400 29.12 1

31/12/2008 48.29 50.09 48.29 49.71 3836000 21.84 0.965

31/12/2007 97.59 98.13 96.75 96.95 1498400 41.34 0.84

03/01/2007 74.89 75.92 74.89 75.19 2639600 31.45


No. of shares 132 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 75.19$ 9,925.08$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.84$ 96.95$ 12,797.40$ 110.88$ 2,872.32$ 2,983.20$ 30.0572% 1.3006 6.6488% 4.3620% 7.8380% 777.92$ 2,205.28$

31-Dec-08 0.97$ 49.71$ 6,561.72$ 127.38$ 6,235.68-$ 6,108.30-$ -47.7308% 0.5227 -40.8947% 1.3713% -62.8730% 8,046.10-$ 1,937.80$

31-Dec-09 1.00$ 63.62$ 8,397.84$ 132.00$ 1,836.12$ 1,968.12$ 29.9940% 1.2999 24.8028% 0.1598% 37.6172% 2,468.33$ 500.21-$

31-Dec-10 1.04$ 101.51$ 13,399.32$ 137.28$ 5,001.48$ 5,138.76$ 61.1914% 1.6119 10.8429% 0.1400% 16.4084% 1,377.96$ 3,760.80$

30-Dec-11 1.02$ 43.53$ 11,491.92$ 269.28$ 1,907.40-$ 1,638.12-$ -12.2254% 0.8777 -6.1149% 0.0600% -9.3258% 1,249.59-$ 388.53-$

31-Dec-12 1.52$ 54.18$ 14,303.52$ 401.28$ 2,811.60$ 3,212.88$ 27.9577% 1.2796 12.9260% 0.0876% 19.6019% 2,252.64$ 960.24$


Tota l Percentage


root 1.5999


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 30.0572% 14.8740% 15.1832% 2.3053%

31-Dec-08 -47.7308% 14.8740% -62.6048% 39.1936%

31-Dec-09 29.9940% 14.8740% 15.1199% 2.2861%

31-Dec-10 61.1914% 14.8740% 46.3174% 21.4530%

30-Dec-11 -12.2254% 14.8740% -27.0994% 7.3438%

31-Dec-12 27.9577% 14.8740% 13.0837% 1.7118%

Sum 89.2441% 74.2937%






64

Date Open High Low Close Volume Adj Close Dividend CRM 1.36 beta coefficient

31/12/2012 163.81 168.33 162.91 168.1 1536800 168.1 0

30/12/2011 102.06 103.1 101.3 101.46 2036100 101.46 0

31/12/2010 131.68 132.17 129.66 132 2009700 132 0

31/12/2009 74.08 74.36 73.55 73.77 1359100 73.77 0

31/12/2008 30.85 32.52 30.83 32.01 1341900 32.01 0

31/12/2007 64.4 64.4 62.45 62.69 879200 62.69 0

03/01/2007 36.57 36.92 35.64 36.07 1069300 36.07 0


No. of shares 277 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 36.07$ 9,991.39$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 62.69$ 17,365.13$ -$ 7,373.74$ 7,373.74$ 73.8009% 1.7380 6.6488% 4.3620% 7.4721% 746.56$ 6,627.18$

31-Dec-08 -$ 32.01$ 8,866.77$ -$ 8,498.36-$ 8,498.36-$ -48.9392% 0.5106 -40.8947% 1.3713% -56.1104% 9,743.64-$ 1,245.28$

31-Dec-09 -$ 73.77$ 20,434.29$ -$ 11,567.52$ 11,567.52$ 130.4592% 2.3046 24.8028% 0.1598% 33.6743% 2,985.82$ 8,581.70$

31-Dec-10 -$ 132.00$ 36,564.00$ -$ 16,129.71$ 16,129.71$ 78.9345% 1.7893 10.8429% 0.1400% 14.6960% 3,003.02$ 13,126.69$

30-Dec-11 -$ 101.46$ 28,104.42$ -$ 8,459.58-$ 8,459.58-$ -23.1364% 0.7686 -6.1149% 0.0600% -8.3378% 3,048.64-$ 5,410.94-$

31-Dec-12 -$ 168.10$ 46,563.70$ -$ 18,459.28$ 18,459.28$ 65.6811% 1.6568 12.9260% 0.0876% 17.5478% 4,931.71$ 13,527.57$


Tota l Percentage


root 4.6604


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 73.8009% 46.1334% 27.6676% 7.6550%

31-Dec-08 -48.9392% 46.1334% -95.0726% 90.3880%

31-Dec-09 130.4592% 46.1334% 84.3259% 71.1085%

31-Dec-10 78.9345% 46.1334% 32.8012% 10.7592%

30-Dec-11 -23.1364% 46.1334% -69.2697% 47.9829%

31-Dec-12 65.6811% 46.1334% 19.5477% 3.8211%

Sum 276.8002% 231.7147%






65

Appendix 3 - Detailed Calculations for WMAC Group of Companies

WMAC Group Total Average Beta 0.9258

Date

Market Value of

the investment

Total Dividends

received

Captial gain year




V(t) TD CG R R% required return required capita l ga in excess return


3-Jan-07 189,100.51$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 216,363.43$ 1,977.89$ 27,262.92$ 29,240.81$ 15.4631% 1.1546 6.6488% 4.3620% 6.4791% 12,251.99$ 16,988.81$

31-Dec-08 145,734.18$ 2,212.89$ 70,629.25-$ 68,416.36-$ -31.6210% 0.6838 -40.8947% 1.3713% -37.7581% 81,694.66-$ 13,278.31$

31-Dec-09 200,010.18$ 2,391.32$ 54,276.00$ 56,667.32$ 38.8840% 1.3888 24.8028% 0.1598% 22.9740% 33,481.02$ 23,186.29$

31-Dec-10 232,227.08$ 2,633.88$ 32,216.90$ 34,850.78$ 17.4245% 1.1742 10.8429% 0.1400% 10.0487% 20,098.34$ 14,752.44$

30-Dec-11 248,871.48$ 3,099.93$ 16,644.40$ 19,744.33$ 8.5022% 1.0850 -6.1149% 0.0600% -5.6566% 13,136.25-$ 32,880.57$

31-Dec-12 282,257.72$ 5,714.68$ 33,386.24$ 39,100.92$ 15.7113% 1.1571 12.9260% 0.0876% 11.9732% 29,797.99$ 9,302.92$

16.2% 18,030.58$ Total Return 111,187.79$ sum R 798.43$ 110,389.36$

Total Percentage

return 58.7983% Total return / initial investment 0.42% 58.38% 13725.7%

root 1.6166


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 15.4631% 10.7273% 4.7358% 0.2243%

31-Dec-08 -31.6210% 10.7273% -42.3484% 17.9339%

31-Dec-09 38.8840% 10.7273% 28.1567% 7.9280%

31-Dec-10 17.4245% 10.7273% 6.6972% 0.4485%

30-Dec-11 8.5022% 10.7273% -2.2252% 0.0495%

31-Dec-12 15.7113% 10.7273% 4.9839% 0.2484%

Sum 64.3640% 26.8325%





WMAC Group Total without AAPL Average Beta 0.9089

Date

Market Value of

the investment

Total Dividends

received

Captial gain year






3-Jan-07 179,128.31$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 192,791.91$ 1,977.89$ 13,663.60$ 15,641.49$ 8.7320% 1.0873 6.6488% 4.3620% 6.4406% 11,536.89$ 4,104.59$

31-Dec-08 135,577.53$ 2,212.89$ 57,214.38-$ 55,001.49-$ -28.5289% 0.7147 -40.8947% 1.3713% -37.0462% 71,422.12-$ 16,420.64$

31-Dec-09 174,933.31$ 2,391.32$ 39,355.78$ 41,747.10$ 30.7920% 1.3079 24.8028% 0.1598% 22.5590% 30,584.93$ 11,162.17$

31-Dec-10 193,842.44$ 2,633.88$ 18,909.13$ 21,543.01$ 12.3150% 1.1231 10.8429% 0.1400% 9.8684% 17,263.11$ 4,279.90$

30-Dec-11 200,676.48$ 3,099.93$ 6,834.04$ 9,933.97$ 5.1248% 1.0512 -6.1149% 0.0600% -5.5526% 10,763.38-$ 20,697.34$

31-Dec-12 218,929.49$ 5,083.98$ 18,253.01$ 23,336.98$ 11.6292% 1.1163 12.9260% 0.0876% 11.7570% 23,593.57$ 256.59-$

17,399.88$ Total Return 57,201.06$ sum R 793.01$ 56,408.06$

Total Percentage

return 31.9330% Total return / initial investment 0.44% 31.49% 7013.2%

root 1.3396


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic


31-Dec-07 8.7320% 6.6773% 2.0547% 0.0422%

31-Dec-08 -28.5289% 6.6773% -35.2063% 12.3948%

31-Dec-09 30.7920% 6.6773% 24.1147% 5.8152%

31-Dec-10 12.3150% 6.6773% 5.6377% 0.3178%

30-Dec-11 5.1248% 6.6773% -1.5526% 0.0241%

31-Dec-12 11.6292% 6.6773% 4.9518% 0.2452%

Sum 40.0640% 18.8394%






66

Date Open High Low Close Volume Adj Close Dividend AAPL 1.08 beta coefficient

31/12/2012 510.53 535.4 509 532.17 23553300 532.17 5.3

30/12/2011 403.51 406.28 403.49 405 6416500 401.44

31/12/2010 322.95 323.48 321.31 322.56 6911000 319.72

31/12/2009 213.13 213.35 210.56 210.73 12586100 208.88

31/12/2008 85.97 87.74 85.34 85.35 21697900 84.6

31/12/2007 199.5 200.5 197.75 198.08 19261900 196.34

03/01/2007 86.29 86.58 81.9 83.8 44225700 83.06


No. of shares 119 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return



DP SP V(t) TD CG R R% required return required capita l ga in excess return


3-Jan-07 -$ 83.80$ 9,972.20$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 198.08$ 23,571.52$ -$ 13,599.32$ 13,599.32$ 136.3723% 2.3637 6.6488% 4.3620% 6.8317% 681.28$ 12,918.04$

31-Dec-08 -$ 85.35$ 10,156.65$ -$ 13,414.87-$ 13,414.87-$ -56.9113% 0.4309 -40.8947% 1.3713% -44.2759% 10,436.51-$ 2,978.36-$

31-Dec-09 -$ 210.73$ 25,076.87$ -$ 14,920.22$ 14,920.22$ 146.9010% 2.4690 24.8028% 0.1598% 26.7742% 2,719.37$ 12,200.85$

31-Dec-10 -$ 322.56$ 38,384.64$ -$ 13,307.77$ 13,307.77$ 53.0679% 1.5307 10.8429% 0.1400% 11.6992% 2,933.78$ 10,373.99$

30-Dec-11 -$ 405.00$ 48,195.00$ -$ 9,810.36$ 9,810.36$ 25.5580% 1.2556 -6.1149% 0.0600% -6.6089% 2,536.79-$ 12,347.15$

31-Dec-12 5.30$ 532.17$ 63,328.23$ 630.70$ 15,133.23$ 15,763.93$ 32.7086% 1.3271 12.9260% 0.0876% 13.9531% 6,724.68$ 9,039.25$


Tota l Percentage


root 6.4137


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 136.3723% 56.2828% 80.0896% 64.1434%

31-Dec-08 -56.9113% 56.2828% -113.1941% 128.1291%

31-Dec-09 146.9010% 56.2828% 90.6182% 82.1167%

31-Dec-10 53.0679% 56.2828% -3.2149% 0.1034%

30-Dec-11 25.5580% 56.2828% -30.7247% 9.4401%

31-Dec-12 32.7086% 56.2828% -23.5741% 5.5574%

Sum 337.6965% 289.4899%





Date Open High Low Close Volume Adj Close Dividend BERK.B 0.52 beta coefficient

31/12/2012 88.49 89.82 88.11 89.7 7011800 89.7 0

30/12/2011 76.85 76.85 76.3 76.3 2397100 76.3 0

31/12/2010 79.27 80.11 79.2 80.11 2935300 80.11 0

31/12/2009 3290 3301 3280 3286 19500 65.72 0

31/12/2008 3040 3248 3000 3214 40100 64.28 0

31/12/2007 4775 4798 4713 4736 21000 94.72 0

03/01/2007 3678 3686 3630 3643 27700 72.86 0


No. of shares 137 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of the

investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 72.86$ 9,981.82$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 94.72$ 12,976.64$ -$ 2,994.82$ 2,994.82$ 30.0027% 1.3000 6.6488% 4.3620% 5.5511% 554.10$ 2,440.72$

31-Dec-08 -$ 64.28$ 8,806.36$ -$ 4,170.28-$ 4,170.28-$ -32.1368% 0.6786 -40.8947% 1.3713% -20.6070% 2,674.09-$ 1,496.19-$

31-Dec-09 -$ 65.72$ 9,003.64$ -$ 197.28$ 197.28$ 2.2402% 1.0224 24.8028% 0.1598% 12.9742% 1,142.55$ 945.27-$

31-Dec-10 -$ 80.11$ 10,975.07$ -$ 1,971.43$ 1,971.43$ 21.8959% 1.2190 10.8429% 0.1400% 5.7055% 513.70$ 1,457.73$

30-Dec-11 -$ 76.30$ 10,453.10$ -$ 521.97-$ 521.97-$ -4.7560% 0.9524 -6.1149% 0.0600% -3.1510% 345.82-$ 176.15-$

31-Dec-12 -$ 89.70$ 12,288.90$ -$ 1,835.80$ 1,835.80$ 17.5623% 1.1756 12.9260% 0.0876% 6.7636% 707.00$ 1,128.80$


Tota l Percentage


root 1.2311


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 30.0027% 5.8014% 24.2014% 5.8571%

31-Dec-08 -32.1368% 5.8014% -37.9382% 14.3931%

31-Dec-09 2.2402% 5.8014% -3.5612% 0.1268%

31-Dec-10 21.8959% 5.8014% 16.0945% 2.5903%

30-Dec-11 -4.7560% 5.8014% -10.5573% 1.1146%

31-Dec-12 17.5623% 5.8014% 11.7609% 1.3832%

Sum 34.8083% 25.4651%






67

Open High Low Close Volume Adj Close Dividend COKE 0.51 beta coefficient

65.32 66.5 65.1 66.5 17400 66.5 1

58.17 59.81 57.28 58.55 36200 57.65 1

56.11 56.3 54.91 55.58 42200 53.82 1

54.94 54.98 53.89 54.02 8200 51.33 1

45.02 46 43.62 45.96 11800 42.77 1

58.85 60.33 58.49 58.88 10800 53.61 1

68.64 68.65 66 66.32 23300 59.3

66.32$

150 10,000.00$

9,948.00$

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





-$ 66.32$ 9,948.00$ -$ -$ -$ 0.0000% 1.0000 0.0000%

1.00$ 58.88$ 8,832.00$ 150.00$ 1,116.00-$ 966.00-$ -9.7105% 0.9029 6.6488% 4.3620% 5.5282% 549.95$ 1,515.95-$

1.00$ 45.96$ 6,894.00$ 150.00$ 1,938.00-$ 1,788.00-$ -20.2446% 0.7976 -40.8947% 1.3713% -20.1843% 1,782.68-$ 5.32-$

1.00$ 54.02$ 8,103.00$ 150.00$ 1,209.00$ 1,359.00$ 19.7128% 1.1971 24.8028% 0.1598% 12.7277% 877.45$ 481.55$

1.00$ 55.58$ 8,337.00$ 150.00$ 234.00$ 384.00$ 4.7390% 1.0474 10.8429% 0.1400% 5.5985% 453.65$ 69.65-$

1.00$ 58.55$ 8,782.50$ 150.00$ 445.50$ 595.50$ 7.1429% 1.0714 -6.1149% 0.0600% -3.0892% 257.55-$ 853.05$

1.00$ 66.50$ 9,975.00$ 150.00$ 1,192.50$ 1,342.50$ 15.2861% 1.1529 12.9260% 0.0876% 6.6352% 582.73$ 759.77$

Tota l Return 927.00$ sum R 423.55$ 503.45$

Tota l Percentage


root 1.1153


(R% +1)'s


Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

-9.7105% 2.8209% -12.5314% 1.5704%

-20.2446% 2.8209% -23.0655% 5.3202%

19.7128% 2.8209% 16.8919% 2.8533%

4.7390% 2.8209% 1.9180% 0.0368%

7.1429% 2.8209% 4.3219% 0.1868%

15.2861% 2.8209% 12.4651% 1.5538%

16.9257% 11.5213%

2.8209% sum / 6




Date Open High Low Close Volume Adj Close Dividend GOOG 1.03 beta coefficient

31/12/2012 700 710.57 696 707.38 1997400 707.38 0

30/12/2011 642.02 646.76 642.02 645.9 1782300 645.9 0

31/12/2010 596.74 598.42 592.03 593.97 1539300 593.97 0

31/12/2009 624.75 625.4 619.98 619.98 1219800 619.98 0

31/12/2008 304.2 311 302.61 307.65 2886800 307.65 0

31/12/2007 698.57 702.49 690.58 691.48 2376200 691.48 0

03/01/2007 466 476.66 461.11 467.59 7706500 467.59


No. of shares 21 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 467.59$ 9,819.39$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 691.48$ 14,521.08$ -$ 4,701.69$ 4,701.69$ 47.8817% 1.4788 6.6488% 4.3620% 6.7174% 659.61$ 4,042.08$

31-Dec-08 -$ 307.65$ 6,460.65$ -$ 8,060.43-$ 8,060.43-$ -55.5085% 0.4449 -40.8947% 1.3713% -42.1626% 6,122.47-$ 1,937.96-$

31-Dec-09 -$ 619.98$ 13,019.58$ -$ 6,558.93$ 6,558.93$ 101.5212% 2.0152 24.8028% 0.1598% 25.5421% 1,650.19$ 4,908.74$

31-Dec-10 -$ 593.97$ 12,473.37$ -$ 546.21-$ 546.21-$ -4.1953% 0.9580 10.8429% 0.1400% 11.1640% 1,453.51$ 1,999.72-$

30-Dec-11 -$ 645.90$ 13,563.90$ -$ 1,090.53$ 1,090.53$ 8.7429% 1.0874 -6.1149% 0.0600% -6.3001% 785.84-$ 1,876.37$

31-Dec-12 -$ 707.38$ 14,854.98$ -$ 1,291.08$ 1,291.08$ 9.5185% 1.0952 12.9260% 0.0876% 13.3111% 1,805.51$ 514.43-$


Tota l Percentage


root 1.5128


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 47.8817% 17.9934% 29.8883% 8.9331%

31-Dec-08 -55.5085% 17.9934% -73.5019% 54.0253%

31-Dec-09 101.5212% 17.9934% 83.5278% 69.7689%

31-Dec-10 -4.1953% 17.9934% -22.1887% 4.9234%

30-Dec-11 8.7429% 17.9934% -9.2506% 0.8557%

31-Dec-12 9.5185% 17.9934% -8.4749% 0.7182%

Sum 107.9605% 139.2246%






68

Date Open High Low Close Volume Adj Close Dividend PG 0.42 beta coefficient

31/12/2012 67 67.97 66.83 67.89 9061900 67.89 2.211

30/12/2011 66.88 66.96 66.59 66.71 4062300 64.53 2.0568

31/12/2010 64.08 64.45 64.01 64.33 5245600 60.27 1.8854

31/12/2009 61.52 61.53 60.56 60.63 5942200 55.11 1.72

31/12/2008 61.35 62.2 61.07 61.82 10844800 54.47 1.55

31/12/2007 74.25 74.26 73.23 73.42 7996700 63.2 1.36

03/01/2007 63.72 64.66 63.7 64.54 9717900 54.41


No. of shares 154 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 64.54$ 9,939.16$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.36$ 73.42$ 11,306.68$ 209.44$ 1,367.52$ 1,576.96$ 15.8661% 1.1587 6.6488% 4.3620% 5.3224% 529.00$ 1,047.96$

31-Dec-08 1.55$ 61.82$ 9,520.28$ 238.70$ 1,786.40-$ 1,547.70-$ -13.6884% 0.8631 -40.8947% 1.3713% -16.3804% 1,852.08-$ 304.38$

31-Dec-09 1.72$ 60.63$ 9,337.02$ 264.88$ 183.26-$ 81.62$ 0.8573% 1.0086 24.8028% 0.1598% 10.5099% 1,000.57$ 918.95-$

31-Dec-10 1.89$ 64.33$ 9,906.82$ 290.35$ 569.80$ 860.15$ 9.2123% 1.0921 10.8429% 0.1400% 4.6352% 432.79$ 427.36$

30-Dec-11 2.06$ 66.71$ 10,273.34$ 316.75$ 366.52$ 683.27$ 6.8969% 1.0690 -6.1149% 0.0600% -2.5335% 250.99-$ 934.25$

31-Dec-12 2.21$ 67.89$ 10,455.06$ 340.49$ 181.72$ 522.21$ 5.0832% 1.0508 12.9260% 0.0876% 5.4797% 562.95$ 40.74-$


Tota l Percentage


root 1.2374


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 15.8661% 4.0379% 11.8282% 1.3991%

31-Dec-08 -13.6884% 4.0379% -17.7263% 3.1422%

31-Dec-09 0.8573% 4.0379% -3.1806% 0.1012%

31-Dec-10 9.2123% 4.0379% 5.1744% 0.2677%

30-Dec-11 6.8969% 4.0379% 2.8590% 0.0817%

31-Dec-12 5.0832% 4.0379% 1.0453% 0.0109%

Sum 24.2275% 5.0028%





Date Open High Low Close Volume Adj Close Dividend LUV 1.11 beta coefficient

31/12/2012 10.13 10.25 10.1 10.24 5516300 10.24 0.029

30/12/2011 8.58 8.64 8.52 8.56 4516000 8.53 0.018

31/12/2010 12.95 13 12.83 12.98 3003800 12.9 0.018

31/12/2009 11.38 11.53 11.3 11.43 5805400 11.34 0.018

31/12/2008 8.43 8.67 8.3 8.62 6789900 8.53 0.018

31/12/2007 12.17 12.36 12.12 12.2 4171400 12.06 0.018

03/01/2007 15.46 15.78 15.35 15.52 7007400 15.32


No. of shares 644 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 15.52$ 9,994.88$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.02$ 12.20$ 7,856.80$ 11.59$ 2,138.08-$ 2,126.49-$ -21.2758% 0.7872 6.6488% 4.3620% 6.9004% 689.68$ 2,816.17-$

31-Dec-08 0.02$ 8.62$ 5,551.28$ 11.59$ 2,305.52-$ 2,293.93-$ -29.1967% 0.7080 -40.8947% 1.3713% -45.5439% 3,578.29-$ 1,284.37$

31-Dec-09 0.02$ 11.43$ 7,360.92$ 11.59$ 1,809.64$ 1,821.23$ 32.8074% 1.3281 24.8028% 0.1598% 27.5135% 1,527.35$ 293.88$

31-Dec-10 0.02$ 12.98$ 8,359.12$ 11.59$ 998.20$ 1,009.79$ 13.7183% 1.1372 10.8429% 0.1400% 12.0202% 884.80$ 124.99$

30-Dec-11 0.02$ 8.56$ 5,512.64$ 11.59$ 2,846.48-$ 2,834.89-$ -33.9137% 0.6609 -6.1149% 0.0600% -6.7941% 567.93-$ 2,266.96-$

31-Dec-12 0.03$ 10.24$ 6,594.56$ 18.68$ 1,081.92$ 1,100.60$ 19.9650% 1.1996 12.9260% 0.0876% 14.3382% 790.41$ 310.18$

Tota l Return 3,323.68-$ sum R 253.97-$ 3,069.71-$

Tota l Percentage


root 0.6674


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -21.2758% -2.9826% -18.2932% 3.3464%

31-Dec-08 -29.1967% -2.9826% -26.2141% 6.8718%

31-Dec-09 32.8074% -2.9826% 35.7900% 12.8093%

31-Dec-10 13.7183% -2.9826% 16.7009% 2.7892%

30-Dec-11 -33.9137% -2.9826% -30.9311% 9.5673%

31-Dec-12 19.9650% -2.9826% 22.9475% 5.2659%

Sum -17.8955% 40.6499%






69

Date Open High Low Close Volume Adj Close Dividend JNJ 0.54 beta coefficient

31/12/2012 69.24 70.11 69.18 70.1 12770000 70.1 2.4

30/12/2011 65.59 65.93 65.53 65.58 4959700 63.24 2.25

31/12/2010 61.9 62.09 61.75 61.85 4981400 57.55 2.11

31/12/2009 65.12 65.12 64.33 64.41 6962300 57.89 1.93

31/12/2008 59.18 60.05 59.07 59.83 11920500 52.03 1.795

31/12/2007 67.29 67.33 66.55 66.7 8515000 56.38 1.62

03/01/2007 66.13 67.1 66.11 66.4 12845300 54.72


No. of shares 150 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 66.40$ 9,960.00$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.62$ 66.70$ 10,005.00$ 243.00$ 45.00$ 288.00$ 2.8916% 1.0289 6.6488% 4.3620% 5.5968% 557.45$ 269.45-$

31-Dec-08 1.80$ 59.83$ 8,974.50$ 269.25$ 1,030.50-$ 761.25-$ -7.6087% 0.9239 -40.8947% 1.3713% -21.4523% 2,146.30-$ 1,385.05$

31-Dec-09 1.93$ 64.41$ 9,661.50$ 289.50$ 687.00$ 976.50$ 10.8808% 1.1088 24.8028% 0.1598% 13.4670% 1,208.60$ 232.10-$

31-Dec-10 2.11$ 61.85$ 9,277.50$ 316.50$ 384.00-$ 67.50-$ -0.6986% 0.9930 10.8429% 0.1400% 5.9196% 571.92$ 639.42-$

30-Dec-11 2.25$ 65.58$ 9,837.00$ 337.50$ 559.50$ 897.00$ 9.6686% 1.0967 -6.1149% 0.0600% -3.2745% 303.79-$ 1,200.79$

31-Dec-12 2.40$ 70.10$ 10,515.00$ 360.00$ 678.00$ 1,038.00$ 10.5520% 1.1055 12.9260% 0.0876% 7.0203% 690.59$ 347.41$


Tota l Percentage


root 1.2690


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 2.8916% 4.2809% -1.3894% 0.0193%

31-Dec-08 -7.6087% 4.2809% -11.8896% 1.4136%

31-Dec-09 10.8808% 4.2809% 6.5999% 0.4356%

31-Dec-10 -0.6986% 4.2809% -4.9796% 0.2480%

30-Dec-11 9.6686% 4.2809% 5.3876% 0.2903%

31-Dec-12 10.5520% 4.2809% 6.2711% 0.3933%

Sum 25.6856% 2.8000%





Date Open High Low Close Volume Adj Close Dividend FDX 1.29 beta coefficient

31/12/2012 90.33 91.8 90.05 91.72 1451700 91.72 0.55

30/12/2011 84.47 84.51 83.33 83.51 1447200 82.98 0.5

31/12/2010 92.53 93.41 92.41 93.01 1015100 91.86 0.46

31/12/2009 84.21 84.74 83.3 83.45 1984200 81.95 0.44

31/12/2008 62.25 64.58 62.25 64.15 2237700 62.5 0.43

31/12/2007 90.14 90.22 89.01 89.17 2865100 86.41 0.39

03/01/2007 108.75 111.06 108.66 109.77 2596700 105.98


No. of shares 91 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 109.77$ 9,989.07$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.39$ 89.17$ 8,114.47$ 35.49$ 1,874.60-$ 1,839.11-$ -18.4112% 0.8159 6.6488% 4.3620% 7.3120% 730.40$ 2,569.51-$

31-Dec-08 0.43$ 64.15$ 5,837.65$ 39.13$ 2,276.82-$ 2,237.69-$ -27.5765% 0.7242 -40.8947% 1.3713% -53.1518% 4,312.99-$ 2,075.30$

31-Dec-09 0.44$ 83.45$ 7,593.95$ 40.04$ 1,756.30$ 1,796.34$ 30.7716% 1.3077 24.8028% 0.1598% 31.9493% 1,865.09$ 68.75-$

31-Dec-10 0.46$ 93.01$ 8,463.91$ 41.86$ 869.96$ 911.82$ 12.0072% 1.1201 10.8429% 0.1400% 13.9468% 1,059.11$ 147.29-$

30-Dec-11 0.50$ 83.51$ 7,599.41$ 45.50$ 864.50-$ 819.00-$ -9.6764% 0.9032 -6.1149% 0.0600% -7.9056% 669.12-$ 149.88-$

31-Dec-12 0.55$ 91.72$ 8,346.52$ 50.05$ 747.11$ 797.16$ 10.4898% 1.1049 12.9260% 0.0876% 16.6491% 1,265.23$ 468.07-$


Tota l Percentage


root 0.8638


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -18.4112% -0.3993% -18.0120% 3.2443%

31-Dec-08 -27.5765% -0.3993% -27.1773% 7.3860%

31-Dec-09 30.7716% -0.3993% 31.1709% 9.7162%

31-Dec-10 12.0072% -0.3993% 12.4065% 1.5392%

30-Dec-11 -9.6764% -0.3993% -9.2771% 0.8606%

31-Dec-12 10.4898% -0.3993% 10.8890% 1.1857%

Sum -2.3956% 23.9322%






70

Date Open High Low Close Volume Adj Close Dividend IBM 0.67 beta coefficient

31/12/2012 189.23 191.68 188.84 191.55 4684900 191.55 3.3

30/12/2011 186.33 186.48 183.85 183.88 3530900 180.84 2.9

31/12/2010 146.73 147.07 145.96 146.76 2969800 141.93 2.5

31/12/2009 132.41 132.85 130.75 130.9 4223400 124.22 2.15

31/12/2008 83.5 85 83.5 84.16 6667700 78.3 1.9

31/12/2007 109.51 110 107.26 108.1 5732300 98.84 1.5

03/01/2007 97.18 98.4 96.26 97.27 9196800 87.71


No. of shares 102 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 97.27$ 9,921.54$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.50$ 108.10$ 11,026.20$ 153.00$ 1,104.66$ 1,257.66$ 12.6761% 1.1268 6.6488% 4.3620% 5.8941% 584.79$ 672.87$

31-Dec-08 1.90$ 84.16$ 8,584.32$ 193.80$ 2,441.88-$ 2,248.08-$ -20.3885% 0.7961 -40.8947% 1.3713% -26.9469% 2,971.22-$ 723.14$

31-Dec-09 2.15$ 130.90$ 13,351.80$ 219.30$ 4,767.48$ 4,986.78$ 58.0917% 1.5809 24.8028% 0.1598% 16.6706% 1,431.06$ 3,555.72$

31-Dec-10 2.50$ 146.76$ 14,969.52$ 255.00$ 1,617.72$ 1,872.72$ 14.0260% 1.1403 10.8429% 0.1400% 7.3110% 976.14$ 896.58$

30-Dec-11 2.90$ 183.88$ 18,755.76$ 295.80$ 3,786.24$ 4,082.04$ 27.2690% 1.2727 -6.1149% 0.0600% -4.0772% 610.33-$ 4,692.37$

31-Dec-12 3.30$ 191.55$ 19,538.10$ 336.60$ 782.34$ 1,118.94$ 5.9658% 1.0597 12.9260% 0.0876% 8.6893% 1,629.75$ 510.81-$

Tota l Return 11,070.06$ sum R 1,040.19$ 10,029.87$

Tota l Percentage


root 2.1808


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 12.6761% 16.2733% -3.5973% 0.1294%

31-Dec-08 -20.3885% 16.2733% -36.6619% 13.4409%

31-Dec-09 58.0917% 16.2733% 41.8184% 17.4878%

31-Dec-10 14.0260% 16.2733% -2.2474% 0.0505%

30-Dec-11 27.2690% 16.2733% 10.9957% 1.2090%

31-Dec-12 5.9658% 16.2733% -10.3075% 1.0624%

Sum 97.6401% 33.3801%





Date Open High Low Close Volume Adj Close Dividend CSCO 1.24 beta coefficient

31/12/2012 19.38 19.76 19.31 19.65 32388300 19.65 0.44

30/12/2011 18.19 18.29 18.05 18.08 20775000 17.61 0.24

31/12/2010 20.24 20.24 20.08 20.23 28677200 19.48 0

31/12/2009 24.1 24.17 23.94 23.94 25208100 23.05 0

31/12/2008 16.18 16.55 16.12 16.3 37513700 15.7 0

31/12/2007 27.25 27.5 27 27.07 60736600 26.07 0

03/01/2007 27.46 27.98 27.33 27.73 64226000 26.7


No. of shares 360 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 27.73$ 9,982.80$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 -$ 27.07$ 9,745.20$ -$ 237.60-$ 237.60-$ -2.3801% 0.9762 6.6488% 4.3620% 7.1976% 718.53$ 956.13-$

31-Dec-08 -$ 16.30$ 5,868.00$ -$ 3,877.20-$ 3,877.20-$ -39.7857% 0.6021 -40.8947% 1.3713% -51.0385% 4,973.80-$ 1,096.60$

31-Dec-09 -$ 23.94$ 8,618.40$ -$ 2,750.40$ 2,750.40$ 46.8712% 1.4687 24.8028% 0.1598% 30.7171% 1,802.48$ 947.92$

31-Dec-10 -$ 20.23$ 7,282.80$ -$ 1,335.60-$ 1,335.60-$ -15.4971% 0.8450 10.8429% 0.1400% 13.4116% 1,155.87$ 2,491.47-$

30-Dec-11 0.24$ 18.08$ 6,508.80$ 86.40$ 774.00-$ 687.60-$ -9.4414% 0.9056 -6.1149% 0.0600% -7.5968% 553.26-$ 134.34-$

31-Dec-12 0.44$ 19.65$ 7,074.00$ 158.40$ 565.20$ 723.60$ 11.1173% 1.1112 12.9260% 0.0876% 16.0072% 1,041.88$ 318.28-$


Tota l Percentage


root 0.7341


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -2.3801% -1.5193% -0.8608% 0.0074%

31-Dec-08 -39.7857% -1.5193% -38.2664% 14.6432%

31-Dec-09 46.8712% -1.5193% 48.3905% 23.4164%

31-Dec-10 -15.4971% -1.5193% -13.9778% 1.9538%

30-Dec-11 -9.4414% -1.5193% -7.9221% 0.6276%

31-Dec-12 11.1173% -1.5193% 12.6366% 1.5968%

Sum -9.1159% 42.2452%






71

Date Open High Low Close Volume Adj Close Dividend COST 0.69 beta coefficient

31/12/2012 96.85 98.93 96.51 98.73 2412700 98.73 8.065

30/12/2011 84.12 84.34 83.28 83.32 1235500 76.89 0.925

31/12/2010 72.69 72.99 72.19 72.21 1304200 65.87 0.795

31/12/2009 60.24 60.3 59.11 59.17 1862900 53.26 0.7

31/12/2008 51.2 52.83 51.13 52.5 4939600 46.59 0.625

31/12/2007 70.22 70.45 69.73 69.76 1862200 61.29 0.565

03/01/2007 53.35 54.09 52.43 52.84 3888100 45.98


No. of shares 189 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 52.84$ 9,986.76$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.57$ 69.76$ 13,184.64$ 106.79$ 3,197.88$ 3,304.67$ 33.0905% 1.3309 6.6488% 4.3620% 5.9399% 593.20$ 2,711.46$

31-Dec-08 0.63$ 52.50$ 9,922.50$ 118.13$ 3,262.14-$ 3,144.02-$ -23.8460% 0.7615 -40.8947% 1.3713% -27.7922% 3,664.30-$ 520.29$

31-Dec-09 0.70$ 59.17$ 11,183.13$ 132.30$ 1,260.63$ 1,392.93$ 14.0381% 1.1404 24.8028% 0.1598% 17.1635% 1,703.05$ 310.12-$

31-Dec-10 0.80$ 72.21$ 13,647.69$ 150.26$ 2,464.56$ 2,614.82$ 23.3818% 1.2338 10.8429% 0.1400% 7.5250% 841.53$ 1,773.28$

30-Dec-11 0.93$ 83.32$ 15,747.48$ 174.83$ 2,099.79$ 2,274.62$ 16.6667% 1.1667 -6.1149% 0.0600% -4.2007% 573.30-$ 2,847.91$

31-Dec-12 8.07$ 98.73$ 18,659.97$ 1,524.29$ 2,912.49$ 4,436.78$ 28.1745% 1.2817 12.9260% 0.0876% 8.9461% 1,408.78$ 3,027.99$


Tota l Percentage


root 2.1325


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 33.0905% 15.2509% 17.8396% 3.1825%

31-Dec-08 -23.8460% 15.2509% -39.0970% 15.2857%

31-Dec-09 14.0381% 15.2509% -1.2128% 0.0147%

31-Dec-10 23.3818% 15.2509% 8.1309% 0.6611%

30-Dec-11 16.6667% 15.2509% 1.4158% 0.0200%

31-Dec-12 28.1745% 15.2509% 12.9236% 1.6702%

Sum 91.5055% 20.8343%





Date Open High Low Close Volume Adj Close Dividend XOM 0.51 beta coefficient

31/12/2012 85.04 86.66 84.7 86.55 19810800 86.55 2.18

30/12/2011 85.16 85.29 84.57 84.76 9768900 82.66 1.85

31/12/2010 73.16 73.51 73.02 73.12 15273700 69.66 1.74

31/12/2009 68.84 68.86 68.11 68.19 18852300 63.25 1.66

31/12/2008 78.42 80.59 78.29 79.83 30026400 72.38 1.55

31/12/2007 94.61 94.96 93.51 93.69 13990900 83.29 1.37

03/01/2007 76.26 76.27 73.51 74.11 30510700 64.81


No. of shares 134 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 74.11$ 9,930.74$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.37$ 93.69$ 12,554.46$ 183.58$ 2,623.72$ 2,807.30$ 28.2688% 1.2827 6.6488% 4.3620% 5.5282% 549.00$ 2,258.30$

31-Dec-08 1.55$ 79.83$ 10,697.22$ 207.70$ 1,857.24-$ 1,649.54-$ -13.1391% 0.8686 -40.8947% 1.3713% -20.1843% 2,534.03-$ 884.49$

31-Dec-09 1.66$ 68.19$ 9,137.46$ 222.44$ 1,559.76-$ 1,337.32-$ -12.5016% 0.8750 24.8028% 0.1598% 12.7277% 1,361.51$ 2,698.83-$

31-Dec-10 1.74$ 73.12$ 9,798.08$ 233.16$ 660.62$ 893.78$ 9.7815% 1.0978 10.8429% 0.1400% 5.5985% 511.56$ 382.22$

30-Dec-11 1.85$ 84.76$ 11,357.84$ 247.90$ 1,559.76$ 1,807.66$ 18.4491% 1.1845 -6.1149% 0.0600% -3.0892% 302.68-$ 2,110.34$

31-Dec-12 2.18$ 86.55$ 11,597.70$ 292.12$ 239.86$ 531.98$ 4.6838% 1.0468 12.9260% 0.0876% 6.6352% 753.61$ 221.63-$


Tota l Percentage


root 1.3270


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 28.2688% 5.9238% 22.3450% 4.9930%

31-Dec-08 -13.1391% 5.9238% -19.0628% 3.6339%

31-Dec-09 -12.5016% 5.9238% -18.4253% 3.3949%

31-Dec-10 9.7815% 5.9238% 3.8577% 0.1488%

30-Dec-11 18.4491% 5.9238% 12.5254% 1.5688%

31-Dec-12 4.6838% 5.9238% -1.2400% 0.0154%

Sum 35.5426% 13.7549%






72

Date Open High Low Close Volume Adj Close Dividend MAR 1.52 beta coefficient

31/12/2012 36.31 37.29 36.24 37.27 1946100 37.27 0.49

30/12/2011 29.19 29.44 29.13 29.17 1346800 28.78 0.37144

31/12/2010 41.42 41.87 41.28 41.54 1796100 38.17 0.19604

31/12/2009 27.73 27.98 27.23 27.25 1536400 24.88 0.08294

31/12/2008 18.38 19.63 18.31 19.45 3466300 17.48 0.33764

31/12/2007 33.95 34.4 33.78 34.18 2214200 30.27 0.24611

03/01/2007 47.7 47.85 47.19 47.34 2575300 41.65


No. of shares 211 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 47.34$ 9,988.74$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.25$ 34.18$ 7,211.98$ 51.93$ 2,776.76-$ 2,724.83-$ -27.2790% 0.7272 6.6488% 4.3620% 7.8380% 782.91$ 3,507.74-$

31-Dec-08 0.34$ 19.45$ 4,103.95$ 71.24$ 3,108.03-$ 3,036.79-$ -42.1075% 0.5789 -40.8947% 1.3713% -62.8730% 4,534.38-$ 1,497.60$

31-Dec-09 0.08$ 27.25$ 5,749.75$ 17.50$ 1,645.80$ 1,663.30$ 40.5293% 1.4053 24.8028% 0.1598% 37.6172% 1,543.79$ 119.51$

31-Dec-10 0.20$ 41.54$ 8,764.94$ 41.36$ 3,015.19$ 3,056.55$ 53.1598% 1.5316 10.8429% 0.1400% 16.4084% 943.44$ 2,113.11$

30-Dec-11 0.37$ 29.17$ 6,154.87$ 78.37$ 2,610.07-$ 2,531.70-$ -28.8844% 0.7112 -6.1149% 0.0600% -9.3258% 817.40-$ 1,714.30-$

31-Dec-12 0.49$ 37.27$ 7,863.97$ 103.39$ 1,709.10$ 1,812.49$ 29.4481% 1.2945 12.9260% 0.0876% 19.6019% 1,206.47$ 606.02$

Tota l Return 1,760.97-$ sum R 875.16-$ 885.81-$

Tota l Percentage


root 0.8342


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -27.2790% 4.1444% -31.4234% 9.8743%

31-Dec-08 -42.1075% 4.1444% -46.2519% 21.3924%

31-Dec-09 40.5293% 4.1444% 36.3849% 13.2386%

31-Dec-10 53.1598% 4.1444% 49.0154% 24.0251%

30-Dec-11 -28.8844% 4.1444% -33.0287% 10.9090%

31-Dec-12 29.4481% 4.1444% 25.3037% 6.4028%

Sum 24.8662% 85.8421%





Date Open High Low Close Volume Adj Close Dividend NKE 0.85 beta coefficient

31/12/2012 50.83 51.64 50.59 51.6 3403700 51.6 0.75 STOCK SPLIT 2:1

30/12/2011 97.39 97.54 96.37 96.37 3304800 47.49 0.645

31/12/2010 85.4 85.84 85.12 85.42 2898200 41.48 0.56

31/12/2009 66.21 66.62 66.05 66.07 3174000 31.6 0.51

31/12/2008 49.81 51.55 49.54 51 7545000 23.94 0.47

31/12/2007 64.01 64.79 64.01 64.24 3684400 29.68 0.3925 STOCK SPLIT 2:1

03/01/2007 98 99.71 96.81 97.67 8649600 22.26


No. of shares 102 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 97.67$ 9,962.34$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.39$ 64.24$ 13,104.96$ 80.07$ 3,142.62$ 3,222.69$ 32.3487% 1.3235 6.6488% 4.3620% 6.3058% 628.20$ 2,594.49$

31-Dec-08 0.47$ 51.00$ 10,404.00$ 95.88$ 2,700.96-$ 2,605.08-$ -19.8786% 0.8012 -40.8947% 1.3713% -34.5548% 4,528.39-$ 1,923.31$

31-Dec-09 0.51$ 66.07$ 13,478.28$ 104.04$ 3,074.28$ 3,178.32$ 30.5490% 1.3055 24.8028% 0.1598% 21.1064% 2,195.90$ 982.42$

31-Dec-10 0.56$ 85.42$ 17,425.68$ 114.24$ 3,947.40$ 4,061.64$ 30.1347% 1.3013 10.8429% 0.1400% 9.2375% 1,245.05$ 2,816.59$

30-Dec-11 0.65$ 96.37$ 19,659.48$ 131.58$ 2,233.80$ 2,365.38$ 13.5741% 1.1357 -6.1149% 0.0600% -5.1887% 904.16-$ 3,269.54$

31-Dec-12 0.75$ 51.60$ 21,052.80$ 306.00$ 1,393.32$ 1,699.32$ 8.6438% 1.0864 12.9260% 0.0876% 11.0002% 2,162.59$ 463.27-$


Tota l Percentage


root 2.2229


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 32.3487% 15.8953% 16.4534% 2.7072%

31-Dec-08 -19.8786% 15.8953% -35.7739% 12.7977%

31-Dec-09 30.5490% 15.8953% 14.6537% 2.1473%

31-Dec-10 30.1347% 15.8953% 14.2394% 2.0276%

30-Dec-11 13.5741% 15.8953% -2.3212% 0.0539%

31-Dec-12 8.6438% 15.8953% -7.2515% 0.5258%

Sum 95.3717% 20.2595%






73

Date Open High Low Close Volume Adj Close Dividend JWN 1.66 beta coefficient

31/12/2012 52.07 53.55 52.07 53.5 3353900 53.5 1.08

30/12/2011 49.98 50.21 49.69 49.71 862400 48.72 0.92

31/12/2010 42.42 42.61 42.25 42.38 854800 40.7 0.76

31/12/2009 38.11 38.31 37.53 37.58 1311900 35.34 0.64

31/12/2008 12.28 13.51 12.28 13.31 6222100 12.15 0.64

31/12/2007 37 37.35 36.34 36.73 2072200 32.51 0.54

03/01/2007 50 51.39 50 51.39 5144800 44.96


No. of shares 194 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 51.39$ 9,969.66$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.54$ 36.73$ 7,125.62$ 104.76$ 2,844.04-$ 2,739.28-$ -27.4762% 0.7252 6.6488% 4.3620% 8.1581% 813.34$ 3,552.62-$

31-Dec-08 0.64$ 13.31$ 2,582.14$ 124.16$ 4,543.48-$ 4,419.32-$ -62.0201% 0.3798 -40.8947% 1.3713% -68.7902% 4,901.73-$ 482.41$

31-Dec-09 0.64$ 37.58$ 7,290.52$ 124.16$ 4,708.38$ 4,832.54$ 187.1525% 2.8715 24.8028% 0.1598% 41.0672% 1,060.41$ 3,772.13$

31-Dec-10 0.76$ 42.38$ 8,221.72$ 147.44$ 931.20$ 1,078.64$ 14.7951% 1.1480 10.8429% 0.1400% 17.9069% 1,305.50$ 226.86-$

30-Dec-11 0.92$ 49.71$ 9,643.74$ 178.48$ 1,422.02$ 1,600.50$ 19.4667% 1.1947 -6.1149% 0.0600% -10.1903% 837.82-$ 2,438.32$

31-Dec-12 1.08$ 53.50$ 10,379.00$ 209.52$ 735.26$ 944.78$ 9.7968% 1.0980 12.9260% 0.0876% 21.3993% 2,063.70$ 1,118.92-$


Tota l Percentage


root 1.1910


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -27.4762% 23.6191% -51.0953% 26.1073%

31-Dec-08 -62.0201% 23.6191% -85.6393% 73.3409%

31-Dec-09 187.1525% 23.6191% 163.5334% 267.4316%

31-Dec-10 14.7951% 23.6191% -8.8240% 0.7786%

30-Dec-11 19.4667% 23.6191% -4.1524% 0.1724%

31-Dec-12 9.7968% 23.6191% -13.8223% 1.9106%

Sum 141.7149% 369.7415%





Date Open High Low Close Volume Adj Close Dividend DIS 1.18 beta coefficient

31/12/2012 48.89 49.8 48.8 49.79 10224500 49.79 0.75

30/12/2011 37.73 37.8 37.36 37.5 4776100 36.93 0.6

31/12/2010 37.37 37.6 37.21 37.51 3650800 36.33 0.4

31/12/2009 32.27 32.75 32.22 32.25 19651700 30.9 0.35

31/12/2008 22.57 22.95 22.52 22.69 9012100 21.49 0.35

31/12/2007 32.42 32.52 32.24 32.28 5447900 30.12 0.35

03/01/2007 34.21 34.54 33.99 34.2 13566800 31.14


No. of shares 292 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 34.20$ 9,986.40$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.35$ 32.28$ 9,425.76$ 102.20$ 560.64-$ 458.44-$ -4.5906% 0.9541 6.6488% 4.3620% 7.0604% 705.08$ 1,163.52-$

31-Dec-08 0.35$ 22.69$ 6,625.48$ 102.20$ 2,800.28-$ 2,698.08-$ -28.6245% 0.7138 -40.8947% 1.3713% -48.5025% 4,571.73-$ 1,873.65$

31-Dec-09 0.35$ 32.25$ 9,417.00$ 102.20$ 2,791.52$ 2,893.72$ 43.6756% 1.4368 24.8028% 0.1598% 29.2386% 1,937.19$ 956.53$

31-Dec-10 0.40$ 37.51$ 10,952.92$ 116.80$ 1,535.92$ 1,652.72$ 17.5504% 1.1755 10.8429% 0.1400% 12.7695% 1,202.50$ 450.22$

30-Dec-11 0.60$ 37.50$ 10,950.00$ 175.20$ 2.92-$ 172.28$ 1.5729% 1.0157 -6.1149% 0.0600% -7.2263% 791.50-$ 963.78$

31-Dec-12 0.75$ 49.79$ 14,538.68$ 219.00$ 3,588.68$ 3,807.68$ 34.7733% 1.3477 12.9260% 0.0876% 15.2369% 1,668.44$ 2,139.24$


Tota l Percentage


root 1.5745


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 -4.5906% 10.7262% -15.3168% 2.3461%

31-Dec-08 -28.6245% 10.7262% -39.3507% 15.4848%

31-Dec-09 43.6756% 10.7262% 32.9494% 10.8567%

31-Dec-10 17.5504% 10.7262% 6.8242% 0.4657%

30-Dec-11 1.5729% 10.7262% -9.1533% 0.8378%

31-Dec-12 34.7733% 10.7262% 24.0472% 5.7827%

Sum 64.3571% 35.7737%






74

Date Open High Low Close Volume Adj Close Dividend GS 1.41 beta coefficient

31/12/2012 125.42 127.68 124.79 127.56 3623000 127.56 1.77

30/12/2011 90.53 91.14 90.14 90.43 4182800 88.96 1.4

31/12/2010 167.58 168.8 167.01 168.16 1636300 163.52 1.4

31/12/2009 167.29 170.13 166.93 168.84 6401800 162.64 1.517

31/12/2008 82.24 86.15 81.12 84.39 14894100 80.3 1.4

31/12/2007 211.59 216.79 209.5 215.05 5834300 202.86 1.4

03/01/2007 200.6 203.32 197.82 200.72 6494900 188.1


No. of shares 49 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 200.72$ 9,835.28$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.40$ 215.05$ 10,537.45$ 68.60$ 702.17$ 770.77$ 7.8368% 1.0784 6.6488% 4.3620% 7.5864% 746.14$ 24.63$

31-Dec-08 1.40$ 84.39$ 4,135.11$ 68.60$ 6,402.34-$ 6,333.74-$ -60.1070% 0.3989 -40.8947% 1.3713% -58.2237% 6,135.29-$ 198.45-$

31-Dec-09 1.52$ 168.84$ 8,273.16$ 74.33$ 4,138.05$ 4,212.38$ 101.8687% 2.0187 24.8028% 0.1598% 34.9064% 1,443.42$ 2,768.96$

31-Dec-10 1.40$ 168.16$ 8,239.84$ 68.60$ 33.32-$ 35.28$ 0.4264% 1.0043 10.8429% 0.1400% 15.2311% 1,260.10$ 1,224.82-$

30-Dec-11 1.40$ 90.43$ 4,431.07$ 68.60$ 3,808.77-$ 3,740.17-$ -45.3913% 0.5461 -6.1149% 0.0600% -8.6466% 712.46-$ 3,027.71-$

31-Dec-12 1.77$ 127.56$ 6,250.44$ 86.73$ 1,819.37$ 1,906.10$ 43.0167% 1.4302 12.9260% 0.0876% 18.1897% 806.00$ 1,100.10$

Tota l Return 3,149.38-$ sum R 2,592.10-$ 557.28-$

Tota l Percentage

return -32.0212% Total return / initial investment 78.5%

root 0.6811


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 7.8368% 7.9417% -0.1049% 0.0001%

31-Dec-08 -60.1070% 7.9417% -68.0487% 46.3062%

31-Dec-09 101.8687% 7.9417% 93.9270% 88.2228%

31-Dec-10 0.4264% 7.9417% -7.5153% 0.5648%

30-Dec-11 -45.3913% 7.9417% -53.3330% 28.4441%

31-Dec-12 43.0167% 7.9417% 35.0750% 12.3025%

Sum 47.6504% 175.8406%





Date Open High Low Close Volume Adj Close Dividend MSFT 0.97 beta coefficient

31/12/2012 26.59 26.77 26.37 26.71 42749500 26.71 0.83

30/12/2011 26 26.12 25.91 25.96 27395700 25.25 0.68

31/12/2010 27.8 27.92 27.63 27.91 24752000 26.44 0.55

31/12/2009 30.98 30.99 30.48 30.48 31929700 28.29 0.52

31/12/2008 19.31 19.68 19.27 19.44 46419000 17.63 0.46

31/12/2007 35.9 35.99 35.52 35.6 35229700 31.69 0.41

03/01/2007 29.91 30.25 29.4 29.86 76935100 26.23


No. of shares 334 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 29.86$ 9,973.24$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 0.41$ 35.60$ 11,890.40$ 136.94$ 1,917.16$ 2,054.10$ 20.5961% 1.2060 6.6488% 4.3620% 6.5802% 656.26$ 1,397.84$

31-Dec-08 0.46$ 19.44$ 6,492.96$ 153.64$ 5,397.44-$ 5,243.80-$ -44.1011% 0.5590 -40.8947% 1.3713% -39.6267% 4,711.77-$ 532.03-$

31-Dec-09 0.52$ 30.48$ 10,180.32$ 173.68$ 3,687.36$ 3,861.04$ 59.4650% 1.5947 24.8028% 0.1598% 24.0635% 1,562.43$ 2,298.61$

31-Dec-10 0.55$ 27.91$ 9,321.94$ 183.70$ 858.38-$ 674.68-$ -6.6273% 0.9337 10.8429% 0.1400% 10.5218% 1,071.16$ 1,745.84-$

30-Dec-11 0.68$ 25.96$ 8,670.64$ 227.12$ 651.30-$ 424.18-$ -4.5503% 0.9545 -6.1149% 0.0600% -5.9296% 552.76-$ 128.58$

31-Dec-12 0.83$ 26.71$ 8,921.14$ 277.22$ 250.50$ 527.72$ 6.0863% 1.0609 12.9260% 0.0876% 12.5408% 1,087.37$ 559.65-$

Tota l Return 100.20$ sum R 887.31-$ 987.51$

Tota l Percentage


root 1.0164


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 20.5961% 5.1448% 15.4513% 2.3874%

31-Dec-08 -44.1011% 5.1448% -49.2459% 24.2516%

31-Dec-09 59.4650% 5.1448% 54.3202% 29.5069%

31-Dec-10 -6.6273% 5.1448% -11.7721% 1.3858%

30-Dec-11 -4.5503% 5.1448% -9.6951% 0.9400%

31-Dec-12 6.0863% 5.1448% 0.9415% 0.0089%

Sum 30.8687% 58.4805%






75

Date Open High Low Close Volume Adj Close Dividend MCD 0.39 beta coefficient

31/12/2012 87.42 88.25 86.81 88.21 6236600 88.21 2.87

30/12/2011 100.43 100.82 100.06 100.33 2957200 97.21 2.53

31/12/2010 76.71 76.86 76.34 76.76 2485100 72.19 2.26

31/12/2009 62.97 63.07 62.39 62.44 4495300 56.87 2.05

31/12/2008 61.64 62.39 61.32 62.19 6230500 54.7 1.625

31/12/2007 59.72 59.94 58.83 58.91 4346000 50.38 1.5

03/01/2007 43.65 44.38 43.5 43.87 7579100 36.55


No. of shares 227 10,000.00$


Date

Dividends paid

during year

Stock price at

year end

Market Value of

the investment

Total

Dividends

received

Captial gain year

to year

Total dollar

return





3-Jan-07 -$ 43.87$ 9,958.49$ -$ -$ -$ 0.0000% 1.0000 0.0000%

31-Dec-07 1.50$ 58.91$ 13,372.57$ 340.50$ 3,414.08$ 3,754.58$ 37.7023% 1.3770 6.6488% 4.3620% 5.2538% 523.20$ 3,231.38$

31-Dec-08 1.63$ 62.19$ 14,117.13$ 368.88$ 744.56$ 1,113.44$ 8.3263% 1.0833 -40.8947% 1.3713% -15.1124% 2,020.92-$ 3,134.35$

31-Dec-09 2.05$ 62.44$ 14,173.88$ 465.35$ 56.75$ 522.10$ 3.6983% 1.0370 24.8028% 0.1598% 9.7706% 1,379.32$ 857.22-$

31-Dec-10 2.26$ 76.76$ 17,424.52$ 513.02$ 3,250.64$ 3,763.66$ 26.5535% 1.2655 10.8429% 0.1400% 4.3141% 611.48$ 3,152.18$

30-Dec-11 2.53$ 100.33$ 22,774.91$ 574.31$ 5,350.39$ 5,924.70$ 34.0021% 1.3400 -6.1149% 0.0600% -2.3482% 409.17-$ 6,333.87$

31-Dec-12 2.87$ 88.21$ 20,023.67$ 651.49$ 2,751.24-$ 2,099.75-$ -9.2196% 0.9078 12.9260% 0.0876% 5.0946% 1,160.28$ 3,260.03-$

Tota l Return 12,978.73$ sum R 1,244.20$ 11,734.52$

Tota l Percentage


root 2.3814


(R% +1)'s


Date

Percentage

return year to

year

Arithmetic

mean Difference

Difference

squared

31-Dec-07 37.7023% 16.8438% 20.8585% 4.3508%

31-Dec-08 8.3263% 16.8438% -8.5176% 0.7255%

31-Dec-09 3.6983% 16.8438% -13.1455% 1.7280%

31-Dec-10 26.5535% 16.8438% 9.7097% 0.9428%

30-Dec-11 34.0021% 16.8438% 17.1583% 2.9441%

31-Dec-12 -9.2196% 16.8438% -26.0634% 6.7930%

Sum 101.0629% 17.4841%





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