Using the stocks in your initial portfolio, assemble a valuation of each stock and the initial portfolio using zero, constant or variable growth models with a market return at 8% and at 12%. [Note that the growth rate must be less than the required rate of return.]

Is the stock of each of these companies over or undervalued?

What is the expected return using the CAPM model?

Assemble a time series ratio analysis (liquidity, activity, debt, and profitability). Identify any events during the period that may have caused the stocks' prices to increase or decrease, explaining how these events affect the stocks' prices.

Information (text below). Please see attachment for question with proper format:

# of Shares Purchased for Each Stock

Closing Prices as of 09/07/2017

Last Dividend Paid Date and Amount

Expected Next Ex-dividend and Paid Dates

Total Investment

Beta

Closing Prices as of 11/03/2017

Value of Investment

Apple Inc. (AAPL)

2750

161.26

05/18/17 $0.63

08/10/17 $0.63

2750 * 161.26 = 443465

1.155

172.5

2750 * 172.5 = 474375

Honda Motor Co., Ltd. (HMC)

1550

28.22

03/07/17 $0.187

03/28/17 $0.189

1550 * 28.22 = 43741

0.9975

32.87

1550 * 32.87 = 50948.5

NIKE, Inc. (NKE)

2550

52.39

07/05/17 $0.18

08/31/17 $0.18

2550 * 52.39 = 133594.5

1.0325

55.71

2550 * 55.71 = 142060.5

Verizon Communications Inc. (VZ)

1675

46.2

08/01/17 $0.577

10/06/16 $0.59

1675 * 46.2 = 77385

0.94

47.42

1675 * 47.42 = 79428.5

Wal-Mart Stores, Inc. (WMT)

2550

80.12

09/05/17 0.51

12/07/17 $0.51

2550 * 80.12 = 204306

0.85

89.68

2550 * 89.68 = 228684

Total Investment:

(2750*161.26)+(1550*28.22)+(2550*52.39)+(1675*46.2)+(2550*80.12)= 902491.5

Amount Held in Cash:

1000000-(2750*161.26)-(1550*28.22)-(2550*52.39)-(1675*46.2)-(2550*80.12)= 97508.5

Total Investment

Beta

Investment * Beta

Apple Inc. (AAPL)

443465

1.155

512202.075

Honda Motor Co., Ltd. (HMC)

43741

0.9975

43631.6475

NIKE, Inc. (NKE)

133594.5

1.0325

137936.3212

Verizon Communications Inc. (VZ)

77385

0.94

72741.9

Wal-Mart Stores, Inc. (WMT)

204306

0.85

173660.1

Total

902491.5

940172.0437

940172.0437 / 902491.5 = Portfolio Beta 1.04175

1a. Using the stocks in your initial portfolio, prepare a valuation of each stock and the initial portfolio using zero, constant or variable growth models with a market return at 8% and at 12%. [Note that the growth rate must be less than the required rate of return.] 1b. Is the stock of each of these companies over or undervalued? 1c. What is the expected return using the CAPM model? 1d. Prepare a time series ratio analysis (liquidity, activity, debt, and profitability). Identify any events during the period that may have caused the stocks' prices to increase or decrease, explaining how these events affect the stocks' prices. # of Shares Purchased for Each Stock Apple Inc. (AAPL) Honda Motor Co., Ltd. (HMC) NIKE, Inc. (NKE) Verizon Communications Inc. (VZ) Wal-Mart Stores, Inc. (WMT) Total Investment: Closing Prices as of 09/07/20 17 Last Dividend Paid Date and Amount Expected Next Exdividend Total and Paid Investme Dates nt Beta 2750 2750 * 05/18/17 08/10/17 161.26 = 161.26 $0.63 $0.63 443465 1550 1550 * 03/07/17 03/28/17 28.22 = 28.22 $0.187 $0.189 43741 2550 2550 * 07/05/17 08/31/17 52.39 = 52.39 $0.18 $0.18 133594.5 1675 1675 * 08/01/17 10/06/16 46.2 = 46.2 $0.577 $0.59 77385 2550 2550 * 09/05/17 12/07/17 80.12 = 80.12 0.51 $0.51 204306 (2750*16 1.26)+(1 550*28.2 2)+(2550 *52.39)+( 1675*46. 2)+(2550 1.155 0.9975 1.0325 0.94 0.85 Closing Prices as of Value of 11/03/20 Investme 17 nt 172.5 2750 * 172.5 = 474375 32.87 1550 * 32.87 = 50948.5 55.71 2550 * 55.71 = 142060.5 47.42 1675 * 47.42 = 79428.5 89.68 2550 * 89.68 = 228684 *80.12)= 902491.5 Amount Held in Cash: 1000000(2750*161. 26)(1550*28.2 2)(2550*52.3 9)(1675*46.2 )(2550*80.1 2)= 97508.5 Total Investment Beta Investment * Beta Apple Inc. (AAPL) 443465 1.155 512202.075 Honda Motor Co., Ltd. (HMC) 43741 0.9975 43631.6475 NIKE, Inc. (NKE) 133594.5 1.0325 137936.3212 Verizon Communications Inc. (VZ) 77385 0.94 72741.9 Wal-Mart Stores, Inc. (WMT) 204306 0.85 173660.1 Total 902491.5 940172.0437 / 902491.5 = Portfolio Beta 1.04175 940172.0437