Hi there, I need help with my investment research assignment. The assignment details are below. Due Thursday March 3rd.

Thanks

Business Finance

Investment research Assignment

Imagine that you have $10,000 to invest. You are going to invest it all in one investment for the next 5 years, at least, at which point you will reevaluate both your investment and personal situations.

You will invest it all in one of the following investments - these are your only 2 options:

• A. A bank account earning 5% per year.
• B. Common stock of McDonald's (MCD)

You will be performing the analysis from the perspective of an investor who is 25 years from retirement and the investor's income is greater than living expenses. The investor has a liquid net worth of $1,000,000 of which 40% is invested in the S&P 500 index, 40% in a medium duration, high quality bond fund and 20% in a savings account earning 5% interest per year. You are to determine if the investor should take $100,000 from the savings account and purchase $100,000 of this company's common stock.

Where are you going to invest your $100,000? Why?

Your recommendation should comprehensively but succinctly provide sufficient information for investor to approve your recommendation by being able to address the investor's reasonable questions including the following:

• Whatistheproblem?Whatareyoutryingtofigureout?
• Whathistoricalfinancialinformationhelpedyoumakeyourdecision-Rations,growthrates,margins,projections,competition?
• Whatroledoesriskplayandhowdoyouaccountforitinyouranalysis?
• Whatindustryinformationhelpedyoumakeyourdecision-suchascompetition,overallmarkets,andstateofeconomy?
• Whatareyouassumingaboutfuture?
• Whatarecriticalfactorsthatledyoutochoosetheoptionyouchose?

Please limit your response to 3 pages, typed, double spaced, plus no more than 2 pages of exhibits. This is both a math and a story assignment: your math has to support your story and your story has to support your math. 3 pages of text plus 2 pages of exhibits is not a lot to cover this assignment; you need yo be concise, relevant, and convincing in those 5 pages.

Extra details from my prof himself.

(Where do i get started)

We have covered a number of topics in the class which ought to be relevant to this assignment:

Stock Pricing

Diversification

Required Return

Ratio Analysis (both time series and cross sectional)

Dividends vs. Retained Earning (ie, mature vs. growth company)

Stock Value vs. Book Value.

Investment return as a function of cash flow and capital gains

The challenge is that you are being asked to put those ideas in the context of a real problem. I would focus more on the company you are analyzing than the savings account. I would also focus on the financial characteristics of the person you are advising and the 5-year time horizon. In terms of data sources, you could be looking at:

Yahoo Finance

Fidelity

Morningstar

the company's 10K reports

the company's annual report

Again, I would read the assignment carefully, particularly the list of bullet points. You don't need to answer those questions directly, but they should influence how you draft your recommendations.