Please make sure that you answer each question with as much detail as possible. You may use other sources to back up your responses (internet, books, journals, etc.). Please keep in mind that I want to see graphs and equations where possible. Questions (answer all questions): 1. Please discuss the Free Cash Flow to Equity (FCFE) model. Be sure to define and describe this specific definition of cash flows. Please provide an example with numbers. 2. Please describe the relative valuation approach to estimating the value of a stock (using the P/E ratio approach). Be sure to discuss how to estimate sales, profit margins, and earnings multipliers. Provide an example using your own numbers (it could be from one of your StockTrak stocks). 3. Please describe the difference between growth stocks and value stocks. Growth stocks make good investments, do you agree with this statement? Be through in your discussion. Please allocate at least 6 pages for each q
John Jetison believes he would need $500,000 to retire today and keep his same lifestyle. If Jetison estimates he will retire in 20 years, how much should he put away each month to have the equivalent of $500,000 in 20 years if the interest he can earn is 5%? If the interest rate changes to 3%, what will Jetison need to save each month? Picture cash flows on a timeline and present it when providing your answer.
Think about your own retirement; what would the timeline look like? In what ways could you better prepare for retirement?
Risk and return of the company
Valuation of the equity
Price
How does the price of the bonds, preferred stocks, and common stocks compare to your estimates?
What return would you have earned investing in this company’s stock? Would you have under- or out-performed the market?
What return would you have earned investing in this company’s stock? Would you have under- or out-performed the market?
What type of cash flow [dividends, Free Cash Flow to Equity (FCFE), or Free Cash Flow to the Firm (FCFF)] would you choose to discount when valuing the entire firm?
Using CAPM, does the firm look to be under- or over-valued?
Company A is the Accquirer and company B is the Acquiree
it should be all about
Bayer / Monsanto M&A
Following is the topic for the library paper:
" In what ways could Islamic finance be considered an alternative to conventional finance? Discuss why or why not Islamic finance is a viable alternative to conventional finance '
The library paper should be double space and at least 10 pages long. Students are expected to use at least a total of 10 academic references (reference journal articles or books) in their papers. The paper will be graded based on 5 criteria: content, language/clarity, references, organization and completeness.
Step By Step Instructions - Week 4 Assignment
Select a public company other than Pfizer.
Go to http://finance.yahoo.com
Click on Market Data on the left of the screen.
Type name of company in Search Box on top of the screen and click on Search Finance button.
Write down the information on the stock such as last closing price, beta of stock, EPS and Dividend in dollars and cents.
On the left side of screen, click on Key Statistics under Company. Note ROE as you scroll down.
You have the basic information to calculate the intrinsic value of the stock using the constant growth assumption in the Dividend Discount Model (refer to text readings).
a) Calculate the required rate of return (r) for the stock using the Capital Asset Pricing Model (CAPM).
r = (10-year Treasury Bond Yield) + [Beta (S&P 500 Index Return - 10-year Treasury Bond Yield)]
Search for 10-year Treasury Bond Yield using the Search box at finance.yahoo.com.
S&P 500 Index Return for 2014 can be obtained at google.com.
Go to www.cnbc.com and explore the video tab in the top banner menu. In the search box, enter the key terms reporting and estimate in separate searches. As you learned in this unit, there are various sources of information.
Watch at least two videos, briefly describe one of the videos viewed, and provide a summary of information the video contained and how it fits in with this unit.