FINA 301 Week 7 Finance Assignment Help | Franklin University
- Franklin University / FINA 301
- 28 Jan 2019
- Price: $10
- Other / Other
FINA 301 Week 7 Finance Assignment Help | Franklin University
Financial Analysis Exercise III
Purpose
The purpose of this assignment is to apply stock valuation techniques to real financial data utilizing an online database.
Overview
Throughout this course you will work with the Yahoo! Finance database and perform elements of securities analysis involving a select group of companies.
Action Items
1. Review the Sherwin-Williams example.
2. Select ONE of the four companies provided by your professor for analysis.
3. Write a 1-2 page (approximately 500 words) paper on the following:
o Part A-Fundamental Valuation:
a. Estimate a growth rate for your firm's Dividends per Share.
b. Assume a 12.5% discount rate.
c. Calculate an estimated value of a share of the stock using the constant-growth model (Eq. 8-6 in the textbook), also known as the Gordon growth model.
d. Compare and contrast your valuation results with the current share price in the market.
e. Respond to this question: What changes in the variables would be necessary in your valuation to best approximate the market valuation?
o Part B - Relative Valuation:
a. Estimate a growth rate for your firm's Earnings per Share (EPS).
b. Determine an applicable Price-Earnings (P/E) ratio for your firm in 5 years.
c. Calculate an estimated value of a share of the stock in 5 years using the P/E ratio model (Eq. 8-10 in the textbook).
d. Respond to this question: Would you characterize your stock as undervalued or overvalued? Explain.
e. Respond to this question: Based on your valuations in parts A and B, would you invest in this stock? Explain.
4. Submit your paper to www.turnitin.com and make any necessary changes to the paper as a result of this submission.
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