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Hello how much do you want for this home work Data CaseA new analyst for a large brokerage firm, you are anxious to demonstrate the

Hello how much do you want for this home work

Data CaseA new analyst for a large brokerage firm, you are anxious to demonstrate the skillsyou learned in your Master program and prove that you are worth your attractivesalary. Your first assignment is to analyse the stock of the General ElectricCorporation. Your boss recommends determining prices based on both the dividenddiscountmodel and discounted free cash flow valuation methods. GE uses a cost ofequity of 10.5% and an after-tax weighted average cost of capital of 7.5%. Theexpected return on new investments is 12%. However, you are a little concernedbecause your finance professor has told you that these two methods can result inwidely differing estimates when applied to real data. You are really hoping that thetwo methods will reach similar prices. Good luck with that!1. Go to Yahoo! Finance http://finance.yahoo.com and enter the symbol forGeneral Electric (GE). From the main page for GE gather the followinginformation and enter it onto a spread sheet:a. The current stock price (last trade) at the top of the page.b. The current dividend amount, which is in the bottom-right cell in the samebox as the stock price.2. Next click on "Key Statistics" from the left side of the page. From the KeyStatistics page gather the following information and enter it on the samespread sheet:a. The number of shares of stock outstanding.b. The Pay-out ratio.3. Next click on "Analyst Estimates" from the left side of the page. From theAnalyst Estimates page find the expected growth rate for the next 5 years andenter it onto your spread sheet. It will be near the very bottom of the page.4. Next click on "Income Statement" near the bottom of the menu on the left.Place the cursor in the middle of the income statements and right-click. Select"Export to Microsoft Excel." Copy and paste the entire three years of incomestatements into a new work-sheet in your existing Excel file. Repeat thisprocess for both the balance sheet and cash flow statement for GeneralElectric. Keep all the different statements in the same Excel worksheet.5. To determine the stock value based on the dividend-discount model:a. Create a timeline in Excel for five years.b. Use the dividend obtained from Yahoo! Finance as the current dividend toforecast the next 5 annual dividends based on the five-year growth rate.c. Determine the long-term growth rate based on GE's pay-out ratio (which isone minus the retention ratio).d. Use the long-term growth rate to determine the stock price for year five.e. Determine the current stock price. T..i@rouenbs.fr6. To determine the stock value based on the discounted free cash flow method:a. Create a timeline in Excel for five years.i. EBIT/Salesii. Tax Rate (Income Tax Expense/Income Before Taxiii. Property Plant and Equipment/Salesiv. Depreciation/Property Plant and Equipmentv.Net Working Capital/Salesb. Create a timeline for the next seven years.c. Forecast future sales based on the most recent year's total revenue growingat the five-year growth rate from Yahoo! for the first five years and the longtermgrowth rate for years six and seven.d. Use the average ratios computed in part (a) to forecast EBIT, property,plant and equipment, depreciation, and net working capital for the next sevenyears.e. Forecast the free cash flow for the next seven years.f. Determine the horizon enterprise value for year 5.g. Determine the enterprise value of the firm as the present value of the freecash flows.h. Determine the stock price.7. Compare the stock prices from the two methods to the actual stock price.What recommendations can you make as to whether clients should buy or sellGeneral Electric's stock based on your price estimates?8. Explain to your boss why the estimates from the two valuation methods differ.Specifically address the assumptions implicit in the models themselves as wellas those you made in preparing your analysis. Why do these estimates differfrom the actual stock price of GE?

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