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a) First calculate the expected holding period return (HPR) on Target Corporations stock (you can also choose any company you would like to do the

a) First calculate the expected holding period return (HPR) on Target Corporations stock (you can also choose any company you would like to do the analysis) based on its current price, its expected price, and its expected dividend. i) Get information for Target (enter TGT under quote search). From the Analyst Opinion Page, find the range for estimated target price for the next fiscal year. ii) Collect information about todays price and the dividend rate. What is the companys expected dividend in dollars for the next fiscal year? iii) Use thee inputs to calculate the range of Targets HPR for the next year. b) Calculate the required return based on the capital asset pricing model (CAPM) i) Use a risk-free rate from Yahoos Market Data page. ii) Use the beta coefficient show in the Key Statistics page. iii) Calculate the historical returns on broad-based market index of your choice. You may use any time period that you deep appropriate. Your goal is to derive an estimate of the expected return on the market index for the coming year. iv) Use the data youve collected as input for the CAPM to find the required rate of return of Target Corporation. c) Compare the expected HPR you calculated in part (a) to require CAPM return you calculated in part (b). What is your best judgement about the stocks current status-do you think it is selling at an appropriate price?

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