Question
Use the excel to solve this below assignment. A.Choose a stock that interest you. utilizing Bloomberg as a source of data, collect the following information:
Use the excel to solve this below assignment.
A.Choose a stock that interest you. utilizing Bloomberg as a source of data, collect the following information:
a. the stock's Betat
b.the rate of return on the market(S&P 500 index)
c.the risk-free rate(R)
d.the last divident paid(D)
e.the annual expected rate of earnings.
B. In Excel, use the discounted dividend model for constant growths stocks and solve for the intrinsic stock price(P)
Based on your above calculations, compare the calculated price with the current market price and indicate whether is the stock price overvalued, undervalued, or at equilibrium? Explain.
C.Now, assume that your company has just reeased a new productand will be experiencing supernormal groeth 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?P).
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