Question
Company Stock and Cost of Capital Analysis In this assignment you will Perform a detailed stock price analysis on your company's stock, and
Company Stock and Cost of Capital Analysis In this assignment you will • Perform a detailed stock price analysis on your company's stock, and • Calculate and analyze the company's Weighted Average Cost of Capital (WACC) 1. Stock Price Analysis: a. Monthly Stock Price Analysis: In Yahoo! Finance go to the Historical Prices page and import into Excel the last 5 years of monthly stock prices (use the ending date as of the end of the previous month). For the below activities use the adjusting closed price ("Adj Close") What is the current stock price? What were the highest and lowest stock price values during this period? For the remaining items in this section you will analyze the Year-Over-Year returns. In your spreadsheet, calculate the Year-Over-Year (YoY) return for each month. (Please submit this worksheet in Excel with your written paper.) The calculation for this is: (month - same month prior year) / (same month prior year) What were the highest and lowest YoY returns during this period? Calculate the mean or average of these YoY returns from your sample. Calculate the standard deviation of the YoY returns. (In Excel, use the STDEV function.) b. Graphical View of Variability: In Yahoo! Finance go to the Basic Chart for your company. Select the 5 year ("5Y") Range of the chart. In the Compare line select the S&P 500 and then press the "Compare" button. Copy and paste this chart into this section of your paper. Interpret your observations. Does the general movement of your company's returns follow that of the S&P 500? Is the company's stock price today higher than the company's stock price at the beginning of this 5 year period? 2. Analysis of WACC a. Calculation of WACC for your company You will need to identify each component of the WACC formula and calculate the overall WACC. The WACC formula for a company that uses debt and equity is as follows: WACC = % Debt * Cost of Debt * (1 - Tax Rate) + % Equity * Cost of Equity You should use Yahoo! Finance and / or the company's most recent 10K report to identify all financial statement inputs. You can use the following guide for the inputs. The specific financial statement data are found on the relevant financial statement. Debt = Long-term Debt + Short-term Debt (on Yahoo! this is called, "Short/Current Long Term Debt") Equity = Market Cap. (This is on the Key Statistics page in Yahoo! Finance) % Debt = Debt / (Debt + Equity) % Equity = 1 - % Debt Cost of Debt = Interest Expense / Debt Tax Rate = Income Tax Expense / Income Before Tax Cost of Equity: Use the CAPM equation to calculate this Cost of Equity = Risk free rate + Beta * (Market Risk Premium) Risk free rate: look up the yield on 10 year US Treasury bonds Beta: This is on the Key Statistics page in Yahoo! Finance Market Risk Premium: Assume 11% minus the risk-free rate b. Interpretation of WACC for Your Company Indicate what the WACC value you derived means for your company. What role does the WACC play for company managers when they are evaluating new projects to undertake? How would company managers and investors use the WACC for an overall company valuation analysis?
Bank of America https://finance.yahoo.com/quote/BAC/history?p=BAC
https://finance.yahoo.com/quote/BAC/history?period1=1333083600&period2=1493528400&interval=1mo&filter=history&frequency=1mo
WACC = http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-sec#fbid=NX_MxixBMS8/hashlink=14228436
Valuation Measures
Market Cap (intraday) 5 | 232.8B |
Enterprise Value 3 | 98.09B |
Trailing P/E | 15.59 |
Forward P/E 1 | 10.91 |
PEG Ratio (5 yr expected) 1 | 1.23 |
Price/Sales (ttm) | 2.85 |
Price/Book (mrq) | 0.96 |
Enterprise Value/Revenue 3 | 1.20 |
Enterprise Value/EBITDA 6 | N/A |
Financial Highlights
Fiscal Year
Fiscal Year Ends | Dec 31, 2016 |
Most Recent Quarter (mrq) | Mar 31, 2017 |
Profitability
Profit Margin | 23.60% |
Operating Margin (ttm) | 35.05% |
Management Effectiveness
Return on Assets (ttm) | 0.87% |
Return on Equity (ttm) | 7.27% |
Income Statement
Revenue (ttm) | 81.72B |
Revenue Per Share (ttm) | 8.00 |
Quarterly Revenue Growth (yoy) | 15.70% |
Gross Profit (ttm) | N/A |
EBITDA | N/A |
Net Income Avi to Common (ttm) | 17.56B |
Diluted EPS (ttm) | 1.63 |
Quarterly Earnings Growth (yoy) | 81.20% |
Balance Sheet
Total Cash (mrq) | 639.85B |
Total Cash Per Share (mrq) | 60.84 |
Total Debt (mrq) | 488.07B |
Total Debt/Equity (mrq) | N/A |
Current Ratio (mrq) | N/A |
Book Value Per Share (mrq) | 24.36 |
Cash Flow Statement
Operating Cash Flow (ttm) | N/A |
Levered Free Cash Flow (ttm) | N/A |
Trading Information
Stock Price History
Beta | 1.60 |
52-Week Change 3 | 60.12% |
S&P500 52-Week Change 3 | 14.77% |
52 Week High 3 | 25.80 |
52 Week Low 3 | 12.05 |
50-Day Moving Average 3 | 23.53 |
200-Day Moving Average 3 | 21.99 |
Share Statistics
Avg Vol (3 month) 3 | 98.56M |
Avg Vol (10 day) 3 | 106.48M |
Shares Outstanding 5 | 9.97B |
Float | 10.51B |
% Held by Insiders 1 | 0.06% |
% Held by Institutions 1 | 63.20% |
Shares Short 3 | 107.78M |
Short Ratio 3 | 1.19 |
Short % of Float 3 | 1.08% |
Shares Short (prior month) 3 | 103.45M |
Dividends & Splits
Forward Annual Dividend Rate 4 | 0.3 |
Forward Annual Dividend Yield 4 | 1.26% |
Trailing Annual Dividend Rate 3 | 0.25 |
Trailing Annual Dividend Yield 3 | 1.06% |
5 Year Average Dividend Yield 4 | 0.74 |
Payout Ratio 4 | 16.67% |
Dividend Date 3 | Mar 31, 2017 |
Ex-Dividend Date 4 | Mar 1, 2017 |
Last Split Factor (new per old) 2 | 2/1 |
Last Split Date 3 | Aug 30, 2004 |
Date
Open | High | Low | Close | Adj Close* | Volume | |
---|---|---|---|---|---|---|
Apr 28, 2017 | 23.57 | 23.72 | 23.32 | 23.34 | 23.34 | 69,384,908 |
Apr 01, 2017 | 23.65 | 24.35 | 22.26 | 23.34 | 23.34 | 1,824,040,300 |
Mar 01, 2017 | 0.075 Dividend | |||||
Mar 01, 2017 | 25.37 | 25.80 | 22.16 | 23.59 | 23.59 | 2,336,311,300 |
Feb 01, 2017 | 22.97 | 24.95 | 22.45 | 24.68 | 24.68 | 1,866,619,200 |
Jan 01, 2017 | 22.60 | 23.55 | 22.01 | 22.64 | 22.64 | 1,917,201,500 |
Dec 01, 2016 | 21.42 | 23.39 | 21.02 | 23.09 | 23.09 | 2,754,257,500 |
Nov 30, 2016 | 0.075 Dividend | |||||
Nov 01, 2016 | 16.56 | 21.19 | 16.28 | 21.12 | 21.12 | 3,121,614,500 |
Oct 01, 2016 | 15.59 | 17.10 | 15.50 | 16.50 | 16.50 | 1,723,132,300 |
Sep 01, 2016 | 16.15 | 16.15 | 14.81 | 15.65 | 15.65 | 1,825,500,700 |
Aug 31, 2016 | 0.075 Dividend | |||||
Aug 01, 2016 | 14.52 | 16.24 | 14.09 | 16.14 | 16.14 | 1,813,474,400 |
Jul 01, 2016 | 13.19 | 14.70 | 12.45 | 14.49 | 14.49 | 1,701,679,800 |
Jun 01, 2016 | 0.05 Dividend | |||||
Jun 01, 2016 | 14.60 | 14.98 | 12.05 | 13.27 | 13.27 | 2,285,514,000 |
May 01, 2016 | 14.58 | 15.15 | 13.80 | 14.79 | 14.79 | 1,737,521,100 |
Apr 01, 2016 | 13.47 | 15.30 | 12.75 | 14.56 | 14.56 | 2,022,233,400 |
Mar 02, 2016 | 0.05 Dividend | |||||
Mar 01, 2016 | 12.64 | 14.03 | 12.62 | 13.52 | 13.52 | 2,415,683,100 |
Feb 01, 2016 | 14.05 | 14.09 | 10.99 | 12.52 | 12.52 | 3,571,160,300 |
Jan 01, 2016 | 16.45 | 16.59 | 12.94 | 14.14 | 14.14 | 2,647,247,500 |
Dec 02, 2015 | 0.05 Dividend | |||||
Dec 01, 2015 | 17.52 | 17.89 | 16.50 | 16.83 | 16.83 | 1,770,846,500 |
Nov 01, 2015 | 16.90 | 18.09 | 16.87 | 17.43 | 17.43 | 1,439,390,500 |
Oct 01, 2015 | 15.52 | 17.44 | 14.63 | 16.78 | 16.78 | 1,848,489,300 |
Sep 02, 2015 | 0.05 Dividend | |||||
Sep 01, 2015 | 15.95 | 16.48 | 15.25 | 15.58 | 15.58 | 1,777,912,500 |
Aug 01, 2015 | 17.91 | 18.07 | 14.60 | 16.44 | 16.44 | 2,325,197,900 |
Jul 01, 2015 | 17.25 | 18.48 | 16.22 | 17.88 | 17.88 | 1,903,543,000 |
Jun 03, 2015 | 0.05 Dividend | |||||
Jun 01, 2015 | 16.58 | 17.72 | 16.47 | 17.02 | 17.02 | 1,659,678,900 |
May 01, 2015 | 16.00 | 16.85 | 15.92 | 16.50 | 16.50 | 1,403,264,600 |
Apr 01, 2015 | 15.42 | 16.05 | 15.25 | 15.93 | 15.93 | 1,464,221,900 |
Mar 04, 2015 | 0.05 Dividend | |||||
Mar 01, 2015 | 15.79 | 16.62 | 15.26 | 15.39 | 15.39 | 1,855,236,900 |
Feb 01, 2015 | 15.27 | 16.79 | 15.12 | 15.81 | 15.81 | 1,910,757,200 |
Jan 01, 2015 | 17.99 | 18.03 | 14.97 | 15.15 | 15.15 | 2,210,324,100 |
Dec 03, 2014 | 0.05 Dividend | |||||
Dec 01, 2014 | 16.92 | 18.21 | 16.59 | 17.89 | 17.89 | 1,712,060,700 |
Nov 01, 2014 | 17.18 | 17.46 | 16.83 | 17.04 | 17.04 | 942,013,300 |
Oct 01, 2014 | 17.07 | 17.41 | 15.43 | 17.16 | 17.16 | 2,208,123,000 |
Sep 03, 2014 | 0.05 Dividend | |||||
Sep 01, 2014 | 16.14 | 17.20 | 15.90 | 17.05 | 17.05 | 1,789,337,700 |
Aug 01, 2014 | 15.18 | 16.46 | 14.84 | 16.09 | 16.09 | 1,445,234,500 |
Jul 01, 2014 | 15.38 | 16.23 | 15.13 | 15.25 | 15.25 | 1,499,782,500 |
Jun 20, 2014 | 0.01 Dividend | |||||
Jun 01, 2014 | 15.16 | 15.94 | 15.05 | 15.37 | 15.37 | 1,256,220,000 |
May 01, 2014 | 15.14 | 15.31 | 14.37 | 15.14 | 15.14 | 1,462,446,400 |
Apr 01, 2014 | 17.28 | 17.40 | 14.86 | 15.14 | 15.14 | 2,245,029,800 |
Mar 05, 2014 | 0.01 Dividend | |||||
Mar 01, 2014 | 16.30 | 18.03 | 16.19 | 17.20 | 17.20 | 2,337,288,800 |
Feb 01, 2014 | 16.77 | 16.92 | 16.13 | 16.53 | 16.53 | 2,055,235,400 |
Jan 01, 2014 | 15.69 | 17.42 | 15.68 | 16.75 | 16.75 | 2,581,396,100 |
Dec 04, 2013 | 0.01 Dividend | |||||
Dec 01, 2013 | 15.84 | 15.97 | 15.06 | 15.57 | 15.57 | 1,661,429,900 |
Nov 01, 2013 | 14.00 | 15.98 | 13.80 | 15.82 | 15.82 | 2,059,558,200 |
Oct 01, 2013 | 13.85 | 14.72 | 13.68 | 13.97 | 13.97 | 2,047,949,700 |
Sep 04, 2013 | 0.01 Dividend | |||||
Sep 01, 2013 | 14.30 | 14.83 | 13.60 | 13.80 | 13.80 | 1,715,010,800 |
Aug 01, 2013 | 14.85 | 14.97 | 13.98 | 14.12 | 14.12 | 1,933,732,700 |
Jul 01, 2013 | 12.95 | 15.03 | 12.73 | 14.60 | 14.60 | 2,461,055,900 |
Jun 05, 2013 | 0.01 Dividend | |||||
Jun 01, 2013 | 13.69 | 13.73 | 12.13 | 12.86 | 12.86 | 2,590,843,100 |
May 01, 2013 | 12.20 | 13.99 | 12.05 | 13.66 | 13.66 | 2,929,147,100 |
Apr 01, 2013 | 12.15 | 12.54 | 11.23 | 12.31 | 12.31 | 2,917,832,000 |
Mar 01, 2013 | 11.13 | 12.94 | 11.02 | 12.18 | 12.18 | 3,198,847,600 |
Feb 27, 2013 | 0.01 Dividend | |||||
Feb 01, 2013 | 11.41 | 12.42 | 10.98 | 11.23 | 11.23 | 3,261,268,700 |
Jan 01, 2013 | 12.05 | 12.20 | 11.02 | 11.32 | 11.32 | 3,342,902,200 |
Dec 05, 2012 | 0.01 Dividend | |||||
Dec 01, 2012 | 9.93 | 11.69 | 9.77 | 11.61 | 11.61 | 3,505,653,600 |
Nov 01, 2012 | 9.34 | 9.97 | 8.92 | 9.86 | 9.86 | 3,166,055,300 |
Oct 01, 2012 | 8.87 | 9.65 | 8.85 | 9.32 | 9.32 | 2,981,868,800 |
Sep 05, 2012 | 0.01 Dividend | |||||
Sep 01, 2012 | 8.00 | 9.79 | 7.93 | 8.83 | 8.83 | 3,169,072,100 |
Aug 01, 2012 | 7.35 | 8.40 | 7.10 | 7.99 | 7.99 | 2,311,106,700 |
Jul 01, 2012 | 8.20 | 8.21 | 6.90 | 7.34 | 7.34 | 2,814,377,800 |
Jun 01, 2012 | 7.12 | 8.22 | 6.85 | 8.18 | 8.18 | 4,061,071,900 |
May 30, 2012 | 0.01 Dividend | |||||
May 01, 2012 | 8.11 | 8.40 | 6.72 | 7.35 | 7.35 | 4,223,024,800 |
Apr 01, 2012 | 9.54 | 9.78 | 7.95 | 8.11 | 8.11 | 4,327,576,60 |
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