Hi,, I really need ur help...
I'm doing an analysis about historical financial performance from period 2004-2008,, in estimating the beta for each period, could I use only 1 year return data of stock & index in the regression,,? since I'm gonna valuate the WACC for each year..

I know that several years (min 4-5 years) historical data were required to estimate the beta,, but isn't it was b'coz we want to use it to predict future stocks movement, therefore the more historical data used in the regression the more the accuracy of the beta estimation since it covered more info of stocks movement in the past..

But if I want to analyze the historical cost of equity of a company in a certain period only, let's say in 2005,, wasn't using 2005 monthly return data (stocks & index) would be more appropriate, since I want to analyze that period only... So I analyzed historical cost of equity in 2005 based on the sensitivity of the stock movement to the index in 2005 too..

Thank you...