Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please do parts B and C ; provide screenshot of excel cells and formulas please! thanks Assignment #2 Stock Valuation Collect the following information from

Please do parts B and C ; provide screenshot of excel cells and formulas please! thanks
image text in transcribed
image text in transcribed
Assignment #2 Stock Valuation Collect the following information from the stock of AAPL The stock's Beta The rate of return on the market (S&P 500 Index) The risk-free rate() The last dividend paid () The annual expected growth rate of earnings B. In Excel, use the Discounted Dividend Model for Constant Growth Stocks and solve for the intrinsic stock price () Based on your above calculations, compare the calculated price with the current market price and indicate whether is the stock price is overvalued, undervalued, or at equilibrium? Explain. C. Now, assume that your company has just released a new product and will be experiencing supernormal growth of 25% for the next three years. In Excel, use the information in "A" and the Discounted Dividend Model for Nonconstant Growth Stocks and solve for the intrinsic stock price). UTAN - . B D E 1 Assignment #2 Stock Valuation 2 The stock I chose is Apple (AAPL). 3 4 A. - Apple's Stock Beta is 1.19 5 B. - The Rate of Return on the market is 17.43% 6 C. - The Risk-Free Rate is 2.9129999 (the yield on a 10 yr. treasury bond) 7 D. - The most recent dividend yield is $0.22 (quarterly) 8 E. - The annual expected growth rate of earnings is 10.5% 9 10 11 Year Dividend Terminal Val PV of Divide PV of Terminal Vall 12 1 13 2 14 3 15 4 16 Intrinsic Value o Assignment #2 Stock Valuation Collect the following information from the stock of AAPL The stock's Beta The rate of return on the market (S&P 500 Index) The risk-free rate() The last dividend paid () The annual expected growth rate of earnings B. In Excel, use the Discounted Dividend Model for Constant Growth Stocks and solve for the intrinsic stock price () Based on your above calculations, compare the calculated price with the current market price and indicate whether is the stock price is overvalued, undervalued, or at equilibrium? Explain. C. Now, assume that your company has just released a new product and will be experiencing supernormal growth of 25% for the next three years. In Excel, use the information in "A" and the Discounted Dividend Model for Nonconstant Growth Stocks and solve for the intrinsic stock price). UTAN - . B D E 1 Assignment #2 Stock Valuation 2 The stock I chose is Apple (AAPL). 3 4 A. - Apple's Stock Beta is 1.19 5 B. - The Rate of Return on the market is 17.43% 6 C. - The Risk-Free Rate is 2.9129999 (the yield on a 10 yr. treasury bond) 7 D. - The most recent dividend yield is $0.22 (quarterly) 8 E. - The annual expected growth rate of earnings is 10.5% 9 10 11 Year Dividend Terminal Val PV of Divide PV of Terminal Vall 12 1 13 2 14 3 15 4 16 Intrinsic Value o

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_2

Step: 3

blur-text-image_3

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

Winning The Losers Game Timeless Strategies For Successful Investing

Authors: Charles D. Ellis

5th Edition

0071545492,0071545506

More Books

Students also viewed these Finance questions