Back in 2008, Mary Goldberg, a 34-year-old widow, got a telephone call from a Wall Street account executive who said that one of his other clients had given him her name. Then he told her his brokerage firm was selling a new corporate bond issue in New World Explorations, a company heavily engaged in oil exploration in the western United States. The bonds in this issue paid investors 11.2 percent a year. He then said that the minimum investment was $10,000 and that if she wanted to take advantage of this "once in a lifetime" opportunity, she had to move fast. She sent the account executive a check and never heard from him again. A few days later (and after the check was paid by the bank), she went to the library to research her bond investment. Unfortunately, she found there was no such company as New World Explorations, and she had lost $10,000. Right then and there, she vowed she would never invest in bonds again. From now on, she would put her money in the bank, where it was guaranteed. REQUIRED: Why do you think so many people are taken in by get-rich-quick schemes?

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This chapter stressed the importance of evaluating potential investments. Now it's your turn to try your skill at evaluating a potential investment in the Walt Disney Company. Assume you could invest $10,000 in the common stock of the company. To help you evaluate this potential investment, carefully examine Exhibit 12-5, which reproduces the research report about Disney from Value Line. The report was published on February 3, 2017. REQUIRED: Based on the research provided by Value Line, would you invest in Disney stock? Justify your answer.