Question
1.Using Yahoo Finance data, estimate the value for the stock using Relative Value Ratios.Show your computations. The stock is JP Morgan and I have to
1.Using Yahoo Finance data, estimate the value for the stock using Relative Value Ratios.Show your computations.
The stock is JP Morgan and I have to use P/E, P/BV, P/CF and P/Sales ratios to establish a price and then a target price, I'm not sure how exactly to do it
Current Share price: 102.41
Value based on P/E= 13.71 (PE Ratio) * 7.71 (eps)= 105.70
Value based on P/BV= 76.92 (BVPS)*1.33 (P/B)=102.30
Value based on P/CF= Assets-Liabilities/Sharesoutstanding=20.12, 102.41/20.12=5.09 PCF Ratio
Value based on P/S= 2.7 (P/S) * 31.1 (sales/share)= $83.97
2.Determine a Price Target 1 year from now.Briefly explain your inputs and logic.
P/E=
3.Recommend an option hedging strategy based on your 1 year price target.Assume you own 1000 shares of the stock at the current market price.Select either a covered call strategy or a protective put strategy.Calculate the expected outcome in 1 year assuming the stock attains your 1 year price target.
4.Recommend a Bull Call Spread or Bear Call Spread based on your 1 year price target.Calculate the expected outcome in 1 year assuming the stock attains your 1 year price target.Use 100 contracts for your option quantities.
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