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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) 5232.8B
Enterprise Value 398.09B
Trailing P/E15.59
Forward P/E 110.91
PEG Ratio (5 yr expected) 11.23
Price/Sales (ttm)2.85
Price/Book (mrq)0.96
Enterprise Value/Revenue 31.20
Enterprise Value/EBITDA 6N/A

Financial Highlights

Fiscal Year

Fiscal Year EndsDec 31, 2016
Most Recent Quarter (mrq)Mar 31, 2017

Profitability

Profit Margin23.60%
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
EBITDAN/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

Beta1.60
52-Week Change 360.12%
S&P500 52-Week Change 314.77%
52 Week High 325.80
52 Week Low 312.05
50-Day Moving Average 323.53
200-Day Moving Average 321.99

Share Statistics

Avg Vol (3 month) 398.56M
Avg Vol (10 day) 3106.48M
Shares Outstanding 59.97B
Float10.51B
% Held by Insiders 10.06%
% Held by Institutions 163.20%
Shares Short 3107.78M
Short Ratio 31.19
Short % of Float 31.08%
Shares Short (prior month) 3103.45M

Dividends & Splits

Forward Annual Dividend Rate 40.3
Forward Annual Dividend Yield 41.26%
Trailing Annual Dividend Rate 30.25
Trailing Annual Dividend Yield 31.06%
5 Year Average Dividend Yield 40.74
Payout Ratio 416.67%
Dividend Date 3Mar 31, 2017
Ex-Dividend Date 4Mar 1, 2017
Last Split Factor (new per old) 22/1
Last Split Date 3Aug 30, 2004

Date

OpenHighLowCloseAdj Close*Volume
Apr 28, 201723.5723.7223.3223.3423.3469,384,908
Apr 01, 201723.6524.3522.2623.3423.341,824,040,300
Mar 01, 20170.075 Dividend
Mar 01, 201725.3725.8022.1623.5923.592,336,311,300
Feb 01, 201722.9724.9522.4524.6824.681,866,619,200
Jan 01, 201722.6023.5522.0122.6422.641,917,201,500
Dec 01, 201621.4223.3921.0223.0923.092,754,257,500
Nov 30, 20160.075 Dividend
Nov 01, 201616.5621.1916.2821.1221.123,121,614,500
Oct 01, 201615.5917.1015.5016.5016.501,723,132,300
Sep 01, 201616.1516.1514.8115.6515.651,825,500,700
Aug 31, 20160.075 Dividend
Aug 01, 201614.5216.2414.0916.1416.141,813,474,400
Jul 01, 201613.1914.7012.4514.4914.491,701,679,800
Jun 01, 20160.05 Dividend
Jun 01, 201614.6014.9812.0513.2713.272,285,514,000
May 01, 201614.5815.1513.8014.7914.791,737,521,100
Apr 01, 201613.4715.3012.7514.5614.562,022,233,400
Mar 02, 20160.05 Dividend
Mar 01, 201612.6414.0312.6213.5213.522,415,683,100
Feb 01, 201614.0514.0910.9912.5212.523,571,160,300
Jan 01, 201616.4516.5912.9414.1414.142,647,247,500
Dec 02, 20150.05 Dividend
Dec 01, 201517.5217.8916.5016.8316.831,770,846,500
Nov 01, 201516.9018.0916.8717.4317.431,439,390,500
Oct 01, 201515.5217.4414.6316.7816.781,848,489,300
Sep 02, 20150.05 Dividend
Sep 01, 201515.9516.4815.2515.5815.581,777,912,500
Aug 01, 201517.9118.0714.6016.4416.442,325,197,900
Jul 01, 201517.2518.4816.2217.8817.881,903,543,000
Jun 03, 20150.05 Dividend
Jun 01, 201516.5817.7216.4717.0217.021,659,678,900
May 01, 201516.0016.8515.9216.5016.501,403,264,600
Apr 01, 201515.4216.0515.2515.9315.931,464,221,900
Mar 04, 20150.05 Dividend
Mar 01, 201515.7916.6215.2615.3915.391,855,236,900
Feb 01, 201515.2716.7915.1215.8115.811,910,757,200
Jan 01, 201517.9918.0314.9715.1515.152,210,324,100
Dec 03, 20140.05 Dividend
Dec 01, 201416.9218.2116.5917.8917.891,712,060,700
Nov 01, 201417.1817.4616.8317.0417.04942,013,300
Oct 01, 201417.0717.4115.4317.1617.162,208,123,000
Sep 03, 20140.05 Dividend
Sep 01, 201416.1417.2015.9017.0517.051,789,337,700
Aug 01, 201415.1816.4614.8416.0916.091,445,234,500
Jul 01, 201415.3816.2315.1315.2515.251,499,782,500
Jun 20, 20140.01 Dividend
Jun 01, 201415.1615.9415.0515.3715.371,256,220,000
May 01, 201415.1415.3114.3715.1415.141,462,446,400
Apr 01, 201417.2817.4014.8615.1415.142,245,029,800
Mar 05, 20140.01 Dividend
Mar 01, 201416.3018.0316.1917.2017.202,337,288,800
Feb 01, 201416.7716.9216.1316.5316.532,055,235,400
Jan 01, 201415.6917.4215.6816.7516.752,581,396,100
Dec 04, 20130.01 Dividend
Dec 01, 201315.8415.9715.0615.5715.571,661,429,900
Nov 01, 201314.0015.9813.8015.8215.822,059,558,200
Oct 01, 201313.8514.7213.6813.9713.972,047,949,700
Sep 04, 20130.01 Dividend
Sep 01, 201314.3014.8313.6013.8013.801,715,010,800
Aug 01, 201314.8514.9713.9814.1214.121,933,732,700
Jul 01, 201312.9515.0312.7314.6014.602,461,055,900
Jun 05, 20130.01 Dividend
Jun 01, 201313.6913.7312.1312.8612.862,590,843,100
May 01, 201312.2013.9912.0513.6613.662,929,147,100
Apr 01, 201312.1512.5411.2312.3112.312,917,832,000
Mar 01, 201311.1312.9411.0212.1812.183,198,847,600
Feb 27, 20130.01 Dividend
Feb 01, 201311.4112.4210.9811.2311.233,261,268,700
Jan 01, 201312.0512.2011.0211.3211.323,342,902,200
Dec 05, 20120.01 Dividend
Dec 01, 20129.9311.699.7711.6111.613,505,653,600
Nov 01, 20129.349.978.929.869.863,166,055,300
Oct 01, 20128.879.658.859.329.322,981,868,800
Sep 05, 20120.01 Dividend
Sep 01, 20128.009.797.938.838.833,169,072,100
Aug 01, 20127.358.407.107.997.992,311,106,700
Jul 01, 20128.208.216.907.347.342,814,377,800
Jun 01, 20127.128.226.858.188.184,061,071,900
May 30, 20120.01 Dividend
May 01, 20128.118.406.727.357.354,223,024,800
Apr 01, 20129.549.787.958.118.11

4,327,576,60

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