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Choose three competitor companies from a manufacturing industry, and three competitors from either a service industry or retailing. Compare yields on the three companies' bonds,
Choose three competitor companies from a manufacturing industry, and three competitors from either a service industry or retailing.
- Compare yields on the three companies' bonds, noting any differences in ratings and the companies' Debt ratios.
- The best source is http://finra-markets.morningstar.com/BondCenter/Default.jsp(Links to an external site.)
- Compare dividend yields and Price/Earnings ratios on the three companies' common stock.
- https://finance.yahoo.com/(Links to an external site.) gives excellent summary information.
- Through web research, (wsj.com or Yahoo Finance, or others) discover analysts' estimated growth rates.Assuming a required return equal to the companies' long-term bond yields plus 600 bps, estimate the common stock value using the DDM.Compare to the market value
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