How stock prices can be estimated

Assignment Help Financial Management
Reference no: EM131662944

Assignment: Application - Stock Valuation

As a manager, it is important to understand how decisions can be analyzed in terms of alternative courses of action and their likely impact on a firm's value. Thus, it is necessary to know how stock prices can be estimated before attempting to measure how a particular decision might affect a firm's market value.

To prepare for this Assignment, choose a publicly-traded company, and then estimate your company's common stock price, using one of the valuation models presented in the assigned readings or outside readings.

In addition, here is a template you will find to be useful for the assignment. It matches the examples given in the textbook on stock valuation models in Chapter 9: Stock Models (Excel workbook)

Defend your choice of model, and explain why it is appropriate to use for your company's stock. Be sure to explain how you arrived at any assumptions regarding values used in the model. Determine whether your company appears to be correctly valued, overvalued, or undervalued based on your company's stock current price and model result. Check Yahoo Finance for current stock prices. Finally, explain why your company's stock appears to be over-, under-, or correctly valued.

Please reference information from the following chapter

Brigham, E. F. ,& Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage Learning.Chapter 9, "Stocks and Their Valuation" (pp. 303-326)

IMPORTANT - Assignment will be graded based on fulfilling the below rubric -

1. The author uses MS Excel or calculator. Formulas and calculations are correct.

2. Author defends choice of model as to why it is appropriate to use for the chosen stock and explains how he or she determined any assumptions on the values used in the model, including why the assumptions were required. Model chosen is compared with other potential models that could have been used in the analysis. Assumptions used for model inputs are evidenced-based through cited research and/or use of estimation techniques based on historical data.

3. The author assesses whether the chosen company appears to be correctly valued, overvalued or undervalued based on the company's stock current price and model result and discusses the implications of his or her conclusion. The author correctly determines the current price of the stock and cites the source of the price data.

4. The author provides reasons as to why the company's stock appears to be over-, under-, or correctly valued. Reasons cited provide rationales that are evidenced-based and beyond personal opinion. Both the model's estimation inaccuracies/weaknesses and the stock's current price are assessed in the reasons given.

Attachment:- Stock-Models.rar

Reference no: EM131662944

Questions Cloud

Explain what are possible repercussions of toxic leadership : Explain what are possible repercussions of toxic leadership? Provide a personal experience or public example of toxic toxic leadership.
How do we turn big data into big information : Consider the video, "Using Big Data To Save Consumers Money" and the business that used large quantities of data to determine.
Resource availability occupies the center : Resource Availability occupies the center, and the three sides are Scope, Cost, and schedule. Interpret this triangle as if it were a system in balance.
How would luisa classify internet payment : At the end of the month, how would Luisa classify her Internet payment of $40-as a cost on the balance sheet or as an expense on the income statement?
How stock prices can be estimated : It is necessary to know how stock prices can be estimated before attempting to measure how a particular decision might affect a firm's market value.
Describe what tests you would perform to assess : Describe what tests you would perform to assess whether 5 of the 20 requirements had been achieved.
Project governance for a project involving small enterprise : You have been given responsibility for managing the project governance for a project involving a small enterprise.
Write a research analysis of a specific target market : Write a research analysis of 3-5 Pages on a specific target market, such as college students, Moms with small kids, recently retired, etc.
Set of hardware and software applications : Over a period of time, your department has standardized around a set of hardware and software applications.

Reviews

Write a Review

Financial Management Questions & Answers

  Supporters in order to break-even for each venue option

How many tickets will UBEAA need to sell to alumni and supporters in order to break-even for each venue option?

  What is amount of the net deductible casualty gain or loss

Determine the net deductible casualty gain or loss for Jan Brady when her adjusted gross income was $43,000 in 2016 before the following occured: All casualties were nonbusiness, personal-use property and none occured in a federally declared disaster..

  Calculate net present value of the loan excluding flotation

Calculate the net present value of the loan excluding flotation costs. Calculate the net present value of the loan excluding flotation costs.

  What will be the amount of capital tax on each investment

Samuel Jenkins made two investments, the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $7,000 on each. If Samuel is in the 28 percent tax bracket, what will be the amount of capital..

  Corporate governance landscape from ethical perspective

Be creative, synthesize course materials, and postulate ways to improve the corporate governance landscape from an ethical perspective.

  Different classes of stock with different voting rights

Why does it take such a long time for a company to build an innovative company? Does Amazon have different classes of stock with different voting rights?

  Tend to equalize prices

If the price of wheat is $25/bushel in the United States and $20/bushel in Canada, all of the following would tend to equalize prices EXCEPT:

  About the current ratio

Current Ratio What effect would the following actions have on a business' current ratio? Assume that net working capital is positive.

  Planning on saving for new house

Ansel and Harriet were a young, highly educated professional couple both employed by one of the leading resort hotels in the area. They were planning on saving for a new house, which they expected to purchase in seven years. How much must Ansel and H..

  Option pricing model to estimate the value of the mine

Use the black scholes option pricing model to estimate the value of the mine, showing your steps in details.

  Conducted taste tests for a new coffee product

A company that franchises coffee houses conducted taste tests for a new coffee product. The company prepared four blends and randomly chose individuals to do a taste test and state which of the four blends they liked best. Results of the taste test f..

  What are your expected costs without seawall

What would be the annual premium with a seawall for an insurance policy that offers full? insurance? what are your expected costs without a? seawall?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd