Can you do one for the company Wal-mart, business and finance homework help
Step By Step Instructions - Week 4Assignment1.Select a public company other than Pfizer.2.Go to http://finance.yahoo.comClick on Market Data on theleft of the screen.Type name of company in Search Box on top of the screen and click on Search Finance button.3.Write down the information on the stock such as last closing price, beta of stock, EPS and Dividend in dollars andcents.4.On the left side of screen, click onKey Statistics under Company. Note ROEas you scroll down. 5.You have the basic information to calculate the intrinsic value of thestock using the constant growthassumption in the Dividend Discount Model (refer to text readings).6.a) Calculate the required rate ofreturn (r) for the stock using the Capital Asset Pricing Model (CAPM).r = (10-year Treasury Bond Yield) + [Beta (S&P 500 IndexReturn - 10-year Treasury Bond Yield)]Search for 10-yearTreasury Bond Yield using the Search box at finance.yahoo.com.S&P 500 IndexReturn for 2014 canbe obtained at google.com. Since thereturn for 2015 was negative, we can use the 2014 value of 11.39%.Plug in the data and calculate the required rate of returnusing the value for beta.b) The constant growth rate of dividends, g = retention ratio x ROE= (1 – payout ratio) x ROE= [1 – (dividend per share/EPS)] x ROE.g will be a percentage.Convert to a decimal by dividing by 100.c) Intrinsic value ofstock = Po = [Do (1 + g)]/(r – g)Do is the dividend just paid while D1 = Do (1 + g) is thedividend to be paid.Knowing Do or D1, r andg, you can calculate the intrinsic value.7.Compare the intrinsic value above tothe stock’s current market price. Explain anydifferences using information gleaned by studying assigned text chapters.Intrinsic value is a version of fair value of a stock. The market price is the current market priceof the stock. The reasons forundervaluation or overvaluation relative to the intrinsic value of the stockcan be varied. (Refer to text readings).
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