Gloria the Investor, Finance Basics

Assignment Help:
Gloria the Investor

Gloria is a seasoned sales manager with a very large international company. Although she has a great deal of experience with sales, she has little experience with investing. Gloria has been investing in her company’s 401K plan. However she has decided to invest some extra money on her own. Gloria has $75,000 she would like to invest.

Since she has recently signed up for internet access to a broker, she is allowed a small number of phone calls to a broker at no additional charge to her.

She calls ABC investments and talks with a Mr. Bill. She tells Mr. Bill she would like to invest in undervalued stocks and can he recommend about ten stocks for her to research. Mr. Bill tells Gloria his company has about 15 stocks they believe are undervalued and will outperform the marker over time. Mr. Bill gave her the company web site where she can down load that list of stocks.

Below is a list of those stocks:

rating


Stock Price


Total 2003

Dividends




5 year total dividend growth


Beta

1


$12.05




$0.95




0.65%




0.65

2


$28.02




$0.00




-100.00%




2.3

3


$17.75




$0.00




0.00%




1.89

4


$92.43




$1.30




6.23%




1.2

5


$63.79




$0.75




0.95%




1.35

6


71.11




$6.00




5.00%




.67

7


$10.00




$0.00




0.00%




1.78

8


$49.51




$0.68




0.75%




0.95

9


$101.00




$5.00




0.38%




0.92

10


$39.78




$0.00




-90.00%




1.5

11


$29.75




$2.00




2.25%




0.85

12


$73.09




$0.00




-1.00%




0.38

13


$20.39




$6.00




5.25%




0.71

14


$18.25




$1.00




8.00%




1

15


$7.00




$1.35




8.85%




0.73















Treasury Bond Rate




4.30%








Return on the Bond Market


11.90%








Answer the below questions

Calculate the required rate of return using the Capital Asset Pricing Model (CAPM).

Using the constant growth formula, calculate the value of each stock

Compare the values you calculated in questions 1 & 2. Do the values closely approximate the stocks market price? If not why not?

What do your results mean for Gloria?

How does your result affect the “market efficiency” theory.

Related Discussions:- Gloria the Investor

Vincent mind set, if u were the professor wht your opinion about vincent mi...

if u were the professor wht your opinion about vincent mind stage

What would be the expected return of the portfolio, A Ltd.'s share gives a ...

A Ltd.'s share gives a return of 20% and B Ltd.'s share gives 32% return. Mr. Gotha invested 25% in A Ltd.'s share and 75% of B Ltd.'s shares. What would be the expected return of

Basel committee on banking supervision, Question 1: ‘The Basel II frame...

Question 1: ‘The Basel II framework provides a range of options for determining the capital requirements for, inter-alia, credit risk and operational risk to allow banks and s

MONEY AND BANKING, Define and explain the credit multplier

Define and explain the credit multplier

Stock market index, Stock Market Index Definition of Stock Market Ind...

Stock Market Index Definition of Stock Market Index An index is a numerical figure that measures relative change in variables between two type of durations. Examples

Becoming a tutor, How to become a tutor in this platform?

How to become a tutor in this platform?

Explain about the functions of financial systems, Explain about the functio...

Explain about the functions of financial systems. Financial systems perform the necessary economic function of channelling funds through units who have stored surplus funds to

Example of conversion ratio and conversion price, Example of Conversion Rat...

Example of Conversion Ratio and Conversion Price ABC Company Ltd books as:   10.000, Sh.20 ordinary share capital 10,000, Shs.10 8% preference share c

Financial and Operational Hedging, There are four different commonly used f...

There are four different commonly used financial hedging techniques and some operational hedging techniques that firms use to manage currency risk. Drawing on literature, critical

Write Your Message!

Captcha
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