Our Services

Get 15% Discount on your First Order

In this assignment, you will choose a company of interest

October 27, 2021

In this assignment, you will choose a company of interest (FORD MOTOR CO) and evaluate its stock’s fundamental value. You will practice how to 1) Use the beta of the stock, market return, and risk-free rate to calculate the required rate of return, 2) evaluate the stock using constant growth dividend discount model. Assignments should be submitted in the format of excel files.

Data: 1) the company’s dividend history from finance.yahoo.com or the company’s own website.

2) the company’s market risk exposure measured by “Beta (5Y Monthly)” from the company’s summary page on finance.yahoo.com

3) choose an estimation period for the required return R, at least going back a 5-year period.

4) risk-free rates (annual rates) for the estimation period; the rates are available monthly at https://fred.stlouisfed.org/series/TB3MS

5) monthly market index (use S&P 500) “Adj Close” prices for the estimation period https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC

Part I. calculate required return R

1) Calculate risk-free rate using average of the annual 3-Month Treasury Bill interest rates over the estimation period.

2) Calculate the monthly market return = (Adj close at the end of month – Adj close at the end of pervious month)/Adj close at the end of previous month

3) Calculate annualized market return = average monthly return * 12

4) Use the formula to calculate required return R = risk-free rate + beta*(annualized market return – risk-free rate).

Part II.

1) Estimate the growth rate of dividends from dividend history data. There is no specific formula for estimating g using historical data. You can use the most recent growth rate, the average growth rate for the past 5-years, or your own model.

2) Use the Constant Growth Model in the (a case of the Dividend Discount Models): Intrinsic Value = D0(1+g)/(R-g)

where D0 is the current annual dividend, and R is the required return we estimated in part I.

Compare your calculation of intrinsic value to the market price, what are your observations and conclusions?

Share This Post

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Advance Directives-research and discuss the legal and ethical basis for Advance Directives such as the Living Will and Durable Power of Attorney for

Advance Directives-research and discuss the legal and ethical basis for Advance Directives such as the Living Will and Durable Power of Attorney for healthcare. Why are these documents so valuable in healthcare situations? What legal authority do these documents provide for decision making by family and/or healthcare providers? Briefly

Module 03 Assignment- Interventions to Promote an Environment of Safety Purpose of the Assignment Identify strategies to

Module 03 Assignment- Interventions to Promote an Environment of Safety Purpose of the Assignment Identify strategies to reduce the risk of injury to clients in various environments. Course Competencies · Select appropriate nursing interventions when providing multidimensional care to clients experiencing alterations in mobility. · Prioritize strategies for safe, effective

Arizona Corp. had the following account balances at 12/1/19: Receivables:

Arizona Corp. had the following account balances at 12/1/19: Receivables: $96,000; Inventory: $240,000; Land: $720,000; Building: $600,000; Liabilities: $480,000; Common stock: $120,000; Additional paid-in capital: $120,000; Retained earnings, 12/1/19: $840,000; Revenues: $360,000; and Expenses: $264,000. Several of Arizona’s accounts have fair values that differ from book value. The fair

Topic: Prevention of drug and substance abuse As a group,

Topic: Prevention of drug and substance abuse As a group, you will create various aspects of a communication campaign. Students are encouraged to keep an open dialogue throughout the semester with the instructor to gain approval and guidance on their project. For Part 1 of this project do the following:

In order to complete this discussion, you need to first:

In order to complete this discussion, you need to first: watch the Watch item “What Is Truth?” read Dew & Foreman pp. 41-43 (section on “Pragmatism” only) read “Truth: Pragmatic Theories” (section 6 only) If you have not done so, stop now to view and read that material. This discussion

numerous telecommunications-ready tools are already available to assist nurses in

numerous telecommunications-ready tools are already available to assist nurses in delivering care and improving patients’ health outcomes. New and innovative tools are rapidly making it to the marketplace, making current tools dated and sometimes obsolete. Continue to reflect upon the point-of-care tools you may be familiar with using in your

Vaginal Delivery Brochure (Make it visually Appealing) Nursing Assignment Help

You have been assigned a topic. You need to create a brochure that will assist you with your teaching experience. You will need to develop a Nursing DX and explain 2 Objectives you would like your patient to achieve by the end of your teaching.You will need to bring your

Biologica astronaut

Imagine you are an exploratory astronaut looking for life throughout the universe. One day you encounter a planet that has no carbon present on its surface. However, your instruments register movement and a variety of other signs that make you think life exists on the surface. Part 1: Before taking

Stigma towards people with mental disorders Nursing Assignment Help

I attached the article to be used in the previous comment. Also 2-3 pages of APA format a).Introduction Establishes purpose of paper Captures attention of readerb)Article SummaryStatistics to support significance of the topic to mental health careKey points of the articleKey evidence presentedExamples of how the evidence can be incorporated

Great Escapes

Synthesis Essay Planning You will write a synthesis research paper. That means you will come up with a theme and thesis and support it. You need a total of 4 sources You should come up with a clever title. You need a solid thesis statement that will guide your writing.

Health care handout

One of the pivotal goals of consumer health literacy efforts is to design educational materials that attract as well as educate users. In this Assignment, you design a health information document on a topic that is of interest to you. To prepare: Select a health issue of interest to you.

Locate a Current Event (no more than 6-9 months old)

Locate a Current Event (no more than 6-9 months old) that represents a Public Administration problem/issue that can be analyzed using the theories/content from Ashworth- APRIL- Re: Taking the initiative, or risk taking inside government The Chapter/Article readings will also provide you with a good deal of information should

Discussion 4: Collins is perhaps best known for her concept

Discussion 4: Collins is perhaps best known for her concept of “intersectionality” in which multiple systems of oppression, or what Collins calls the matrix of domination, overlap to create systematic inequality that each of us faces in our own unique way. Draw upon your own lived experience to describe

Some organizations have implemented bring your own device (BYOD) policies.

Some organizations have implemented bring your own device (BYOD) policies. This enables organizations to save money on equipment costs because employees are now using their personal computers. At the same time, BYOD policies also present challenges for organizations. Now organizations are in the business of supporting personal computers. Go

Implementing Health in Ghana – Premium Paper Help

Premium Paper Help is a professional writing service that provides original papers. Our products include academic papers of varying complexity and other personalized services, along with research materials for assistance purposes only. All the materials from our website should be used with proper references.

It is vital to understand the culture of your identified

It is vital to understand the culture of your identified population in order to effectively reach your defined population and tailor your message. After viewing each brochure. Submission- APA, 1 1/2 pages How did the messaging change depending on the defined population? Do you believe the campaign succeeded in

Describe how the confusion matrix is used for model evaluation.

Describe how the confusion matrix is used for model evaluation. Describe the definition of accuracy, precision, recall, sensitivity, specificity, True positive rate, False positive rate. Synthesize real-life examples where you would rely on each one of these measures to evaluate prediction, or classification, performance of your model. What is a

see attachment Module 4: Discussion . In a substantial post based on the readings assigned in Module 4 (Chapters 24 & 25), the April 9

see attachment Module 4: Discussion . In a substantial post based on the readings assigned in Module 4 (Chapters 24 & 25), the April 9 live/Teams lecture, and your own reflections, address these questions (by Thursday). Make it clear that you have read the chapters and absorbed the lecture information! Use proper