Question 1 – Technical Analysisa)Download TELUS Corp’s stock price data (adjusted daily closing prices for T.TO) from September 30, 2013 to September 30, 2019 from Yahoo Finance or FactSet. Graph the adjusted daily closing prices using an Excel graph (not a graph downloaded from the web!). b)Using the price data you obtained in 3a, calculate the 50 and 200-day moving averages and plot them on the same graph.c)Based on the 50-200 day moving average cross-over system described in class, use your observations from part b) above, to identify any strong buy or sell signal(s) that you observed for TELUS stock. State the date on which the signal was observed and whether it was a “buy” signal or a “sell” signal for the company.Question 2 – Buying Stocksa)Calculate the return you would have earned if you bought 1000 shares of TELUS Corp for cash at the closing price on September 10th, 2019 and sold your shares at the closing price on October 31, 2019. Compare with the returns you would have earned if you bought the shares on margin (assume 30% margin and ignore interest costs). What can you conclude? b)Fill in the table and dates below to show what would happen to your margin account when buying 1000 TELUS Corp shares on margin? Q 38. Peak’ s Organic Foods ’current dividend is $4. You expect the growth rate to be 10 percent for years 1 to 5, and 3 percent from years 6 to infinity. The required rate of return on this firm’ s equity is 12.5 percent. Determine the following: a. The expected dividend at the end of year 5 b. The expected dividend at the end of year 6c. The expected price of the stock at the end of year 5 (immediately after the year 5 dividend) d. The price of the stock todayQ39. Peele Clothiers Ltd.’ s current dividend is $3.60. Dividends are expected to grow by 9 percent for years 1 to 3, 6 percent for years 4 to 7, and 2 percent thereafter. The required rate of return on the stock is 12 percent. What is the current stock price for Peele? Q.40. Investors demand a rate of return of 15 percent on Sweet Life Food Inc.’ s common shares. These shares are currently trading at $20 per share. Dividend payout for the current year is expected to be $1 per share. a.What is the implied long-term growth rate that shareholders expect? b.If, because of a recession, the dividend growth rate is projected to be 0, what will be the new share value?c)Conversely, if, because of a booming economy, investors reassess their growth expectations to 15 percent per year, what will happen to the market price of Sweet Life Food’ s common shares?
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