Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer these about Amazon Company.Inc. Pick 3-5 bonds issued by your firm over the three-year period and describe the bonds in terms of par,

Please answer these about Amazon Company.Inc. Pick 3-5 bonds issued by your firm over the three-year period and describe the bonds in terms of par, coupon, term to maturity, price, and yield to maturity. Discuss the relationship between bond price and yield to maturity? Compare your firms bonds yields to the current Treasury bond yield curve. Discuss the factors that lead to the difference in the yields between your firms bonds and the Treasury bond. You can find corporate and Treasury bond information from public websites such as FINRA. Be sure to discuss the nominal interest. Calculate the free cash flows (FCF) as in Section 6-7 based on the 3 most recent fiscal year financial data. Note that the free cash flows are different than the operating cash flows in the Statement of Cash Flows. Discuss their differences and explain why the Statement of Cash Flows cannot be used directly to value stocks. How do you value your firms stock using the free cash flows? Calculate the intrinsic value of your firms stock based on your estimations of the future free cash flows (Assume that FCFs grows at the rate of 20%, 12%, and 8% in the next one, two, and three years, respectively, and grows at 5% constant long-term growth rate thereafter.). Be sure to lay out the steps in calculating the free cash flows and the intrinsic value of the stock.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Dealing In Traded Options

Authors: Richard Hexton

1st Edition

0131985574, 978-0131985575

More Books

Students also viewed these Finance questions

Question

The paleolithic age human life, short write up ?

Answered: 1 week ago