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You are interested in the ABC Corp and week to place a value on the 3 stock so you can tell whether it is over-valued
You are interested in the ABC Corp and week to place a value on the | |||
3 | stock so you can tell whether it is over-valued or under-valued | ||
4 | at this time. | ||
5 | You have obtained the following financial data. | ||
6 | It is both micro and macro related data. | ||
7 | The micro data of ABC Corp: | ||
8 | The current price of ABC stock is | $33.15 | |
9 | It recently paid a dividend of | $2.83 | |
10 | Constant dividend growth rate | 6.98% | |
11 | The macro data of ABC corp: | ||
12 | Treasury bills have a rate of | 1.88% | |
13 | The return on the S&P Index is | 12.11% | |
14 | The stock has a beta of | 1.78 | |
15 | |||
16 | What is Alpha and what is the real intrinsic value os ABC stock? |
a. | Alpha = -0.0398 Real Intrinsic Value = $23.09 | |
b. | Alpha = -0.3980 Real Intrinsic Value = $33.09
| |
c. | Alpha = -0.0598 Real Intrinsic Value = $32.09
| |
d. | Alpha = -0.0893 Real Intrinsic Value = $23.09
|
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