Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alphabet Corporation (NASDAQ: GOOG) has an EPS of $4.96. Calculate the value of the stocks using the Benjamin Graham formula, according to the assumptions

 

Alphabet Corporation (NASDAQ: GOOG) has an EPS of $4.96. Calculate the value of the stocks using the Benjamin Graham formula, according to the assumptions in the questions below and then compare your results withe current price of the stock (Visit finance.yahoo.com and look for Goog's stock price) and say if you should invest in the stock or not: a) b) Discount Rate: 4%, Growth rate: 3%., Should you invest? Why? Discount Rate: 4%, Growth Rate: 6%, Should you invest? Why? First Republic Bank (NYSE: FRC) has an EPS of $6.10 and a dividend of $1.08. Calculate the value of the stocks using the Benjamin Graham formula and the constant growth model formula, according to a Discount Rate: 8% and estimated Growth Rate: 2%. Compare the results obtained using the two formulas and also compare them with the current price of the stock (Visit finance.yahoo.com and look for FRC's stock price) and say if you should invest in the stock or not based in the result of each of your calculations (with the BG's formula and CGM's formula).

Step by Step Solution

3.46 Rating (162 Votes )

There are 3 Steps involved in it

Step: 1

a To calculate the value of Alphabet Corporation GOOG using the Benjamin Graham formula we need the EPS earnings per share the discount rate and the g... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Pathway To Introductory Statistics

Authors: Jay Lehmann

1st Edition

0134107179, 978-0134107172

More Books

Students also viewed these Finance questions

Question

13/18 9/18 Perform the indicated operation by hand.

Answered: 1 week ago

Question

E = t s / n: E = 2.94, s = 4.83, n = 9 (margin of error)

Answered: 1 week ago

Question

y = 3(5)x Graph the equation by hand.

Answered: 1 week ago