Select ONE of the four companies provided by your professor for analysis. APPL

Current Share price $241.41

Write a 1-2 page (approximately 500 words) paper on the following: Part A-Fundamental Valuation:

Estimate a growth rate for your firm's Dividends per Share.

Assume a 12.5% discount rate.

Calculate an estimated value of a share of the stock using the constant-growth model (Eq. 8-6 in the textbook), also known as the Gordon growth model.

Compare and contrast your valuation results with the current share price in the market.

Respond to this question: What changes in the variables would be necessary in your valuation to best approximate the market valuation?

Part B - Relative Valuation:

Estimate a growth rate for your firm's Earnings per Share (EPS). Determine an applicable Price-Earnings (P/E) ratio for your firm in 5 years.

Calculate an estimated value of a share of the stock in 5 years using the P/E ratio model (Eq. 8-10 in the textbook). Respond to this question:

Would you characterize your stock as undervalued or overvalued? Explain. Respond to this question: Based on your valuations in parts A and B, would you invest in this stock? Explain.

Year Amount 2019 0.77 2018 0.73 2017 0.63 2016 0.57 Current Value of the Dividend Dividend Growth Rate *D.(1 + ) P = r - g Compounded Rate of return Year Amount 2019 0.77 2018 0.73 2017 0.63 2016 0.57 Current Value of the Dividend Dividend Growth Rate *D.(1 + ) P = r - g Compounded Rate of return