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1- Choose 2 firms that interest you and download their financial statements from any of these Web sites: finance.yahoo.com, finance.google.com, or money.msn.com. a. For each

image text in transcribed 1- Choose 2 firms that interest you and download their financial statements from any of these Web sites: finance.yahoo.com, finance.google.com, or money.msn.com. a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividends per share, and the net income. Record them in a spreadsheet (EXCEL). b. Calculate the total amount of dividends paid (Dividends per share Number of shares outstanding), the dividend payout ratio (Total dividends paid/Net income), and the plowback ratio (1 - Dividend payout ratio). c. Compute the sustainable growth rate, g=bROE, where b equals the plowback ratio. 2- Now calculate the intrinsic value of the firms you selected? You can find the required return ( k ) on each firm based on the CAPM. Make reasonable judgments about the market risk premium and the risk-free rate (you can find them online) Also, You can find the beta of each firm from its Statistics page

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