CORPORATE FINANCE, PGP 2023-24, TERM 2

INSTRUCTIONS ON BLOOMBERG GROUP ASSIGNMENT

(Marks: 4 on Total of 100 for course)

Due by 11:59 pm on January 8, 2024

The objective of this assignment is to (i) familiarize you with the estimation of asset betas using
actual data from a given company’s financial statements and from the stock market, and (ii) to get
you acquainted with Bloomberg (a valuable resource for subsequent Finance electives).

These instructions are in 2 parts: (A) General instructions on using Bloomberg, and (B)
Specific instructions on the required analysis, including instructions re: report to be submitted.

(A) General instructions on using Bloomberg (Relevant screen-shots are provided in this document.)

1. Use one of the 9 Bloomberg desktops (each has a terminal with 2 shared screens) located in the
Bloomberg Lab (open 24x7) in the basement of the New Classroom Block. Power the terminal on
(bottom right of terminal).

• Double click on the ‘Bloomberg Icon’ on the Desktop (or in the task bar at the bottom) to
open Bloomberg.

• Click on ‘<Enter> or <GO> to begin’ once the Bloomberg window opens.

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 The next page will show you an option ‘Create a New Login’; click on the same and create an
account for yourself on Bloomberg. (You need to have an account on Bloomberg to proceed
further and access the data).

• Use your IIMB email ID and input your mobile number to which a security code will be sent
by Bloomberg to complete the creation of an account.

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2. Once you have a login ID, use it to access data on Bloomberg as detailed in (3)-(8) below. After
logging in1, the top screen will show you three dropdown menus on the top extreme left. Going
from left to right: the first menu shows you the security loaded (already loaded or chosen by you);
the second the function that is being used (already loaded or chosen by you); and the third will help
you find related functions that can be used on the loaded security.

1 To log-out, pick Exit Bloomberg under the Options icon on the top right of the screen.

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3. Below the three dropdown menus of (2), you will find a Search Bar which you can use to search
for any security or a function of your choice. One can proceed either by choosing a security (e.g.
TATA MOTORS) or by a choice of a function (e.g. BETA).

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4. Load the security by typing, in the Search Bar, the name of the company assigned to you. Do not
press ‘Enter’ after you type; wait for the Bloomberg to show you ‘related items’ in a drop-down
menu. From the latter menu, pick the company, for e.g. TATA MOTORS Ltd (India), or TTMT IN
Equity.

5. After loading the security, type ‘BETA’ in the search bar and click on the first item under
‘FUNCTIONS’, which is ‘Historical Beta’ of this equity.

This takes you to a screen which displays a scatter-plot with results of a regression of your chosen
security against a market index. Ensure that (i) Index = SENSEX for IN companies & SPX Index for US
companies, and (ii) The regression is “on percent” (far right); (iii) Frequency = WKLY (for weekly); and
(iv) Time period = 2Y (for the past 2 years). Also ensure that “Data = Last Price” and “Linear” are
checked, that “Beta +/-“ and “Non-Param” are unchecked, and that “Local” is displayed in the
StdDev field (far right). Record the Raw Beta of the stock. (This is 𝛽𝐸 ). Also take a screen-shot of
this screen and save it as a JPEG file – do this by going to the top of the screen, right-clicking, and
choosing Save Screen – and make sure Raw Beta appears in this screen-shot.

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6. Go back to the Search Bar and type “FPDF” there. On the screen that pops up, go to Fundamental
Defaults (for the terminal’s settings). In the Parent/Consolidated Reporting field, pick “Prefer
Consolidated Data (when available)” from the drop-down menu.

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7. Next, go to the Financial Statements of the loaded security/company. You do this by typing “FA”
next to the company’s name in the Search Bar. Go to the Balance Sheet (tab “B/S”). Pick the March
2022 (or most recent FY ending) balance sheet shown.2 Scroll down the Balance Sheet so that Total
Equity and Total Liabilities and Equity are visible. Record the Total Liabilities and Equity, and Total
Equity, of the company. Also take a screen-shot of this screen and save it as a JPEG file – make
sure the Total Liabilities and Equity and Total Equity appears in this screen-shot.

2 You can download any statement – into Excel or PDF - by clicking on the ‘Export’ button that you can find just above the
statement.

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8. Go back to the Search Bar and type “DES” next to your company’s name. From the screen that
appears, record Mkt Cap (for the equity market capitalization of the company, i.e. its equity market
value). Again, take a screen-shot making sure Mkt Cap appears in it.

(B) Specific instructions on the required analysis

9. Along with this write-up you are being sent an Excel file with the list of companies (for your section)
with each company identified by its name, ticker, sector, and country3. Using the Excel list, You
section’s subject representative(s) will:
(i) Use the official PGP Office “Groups of 5” list (where a small number of groups in each
section may have 4 students each);
(ii) Assign 1 company to each student (with the associated info on ticker, sector, and
whether India or US for that company) as follows:
(a) All companies assigned to students in a group must be from the same secto;
(b) Ensure that no company is assigned to more than 1 student;
(c) Each group should have some Indian companies as well as some US firms.
(iii) Send the results/info of (i) and (ii) to all students and to your section’s instructor – as
soon as possible (before the start of the Term 2 exam period).

3 The universe of firms (supplied to all sections) is the union of those in NIFTY 500 & SP500 as of December 9, 2022.
Between then and the date that students actually work on the assignment, a company’s stock could be delisted and/or
Bloomberg coverage of it may cease. If a firm assigned to you has no coverage on Bloomberg, please inform your section
instructor and your SR(s) as soon as possible. Another replacement company will be provided to you.”

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10. Each student has to work on the company assigned to him/her and will then have to work with
the others in his/her group to complete the assignment. Each group submits only 1 report; see (13)
below.

11. Analysis needed to be done by each student: Use the Raw Beta of the stock assigned to you. This
is the (levered) equity beta, 𝛽𝐸 of (5). Based on the relationship
𝐷
𝛽𝐸 = 𝛽𝐴 [1 + (1 − 𝜏𝑐 ) ]
𝐸
unlever 𝛽𝐸 , to obtain the (unlevered) asset beta 𝛽𝐴 of the company assigned to you. (The relationship
above assumes that the beta of the company’s debt is zero). Here, 𝜏𝑐 , the marginal tax rate of the
company is to be taken as 30% for an Indian company and 21% for a US company. Also, E, the market
value of equity, is the number recorded by you in (8). Compute D, as D = Total Liabilities and Equity –
Total Equity, where both the latter are book values as recorded by you in (7). Record the resulting
(unlevered) asset beta of your company 𝛽𝐴 .

12. Now we move to the group level, once all members have finished their respective analyses of the
individual stocks assigned to them:
(i) Record the average asset beta for the companies in your group by computing the arithmetic
mean of the asset betas recorded by each group member.
(ii) Compare the average asset beta with the individual companies’ asset betas. Write down
brief reasons on why there is dispersion in company-level asset betas from the average.

13. A single email, per group, containing your group report is to be sent to your section’s professor,
with a single file attached. Use “Bloomberg, Group x” in the subject field of your email where x =
your group number. The format of your submitted report should be exactly as on the next page. Fill
in the blank areas and complete the rest.

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 Bloomberg Group Assignment, CorpFin 2022-23
Group No ________ Sector____________ (e.g Transportation)

Student Name Roll No Company Ticker Country

Analysis:
Company 𝛽𝐸 𝐸 𝐷 𝛽𝐴
Name

Average unlevered asset beta =

Offer your best explanation for the differences or similarities in the company-specific asset
beta values vis-à-vis the average asset beta.

On the following pages, paste images of the 3 screen-shots, per company showing (i) 𝛽𝐸 , (ii) Total
Liabilities, and Total Equity, and (iii) and E.

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