FINC 340 & 440 WEEK 4

FINC 440 ASSIGNMENT

Assignment

Dividend Discount Model Valuation:

1. Dividend Discount Model Valuation - Using the constant growth dividend discount model formula prepare a valuation estimate of the common stock of the company that you selected.  What are your findings?

 

2. What are the principal assumptions used in the analysis?  How do you defend them?

 

3. How does the estimated intrinsic value compare to the current market value of the stock?  What explains the difference?

 

4. Do you believe that the dividend discount model is a useful approach to valuation?  Why or why not?

 OR

RELATIVE VALUATION: 1. Prepare a comparison of financial ratios and rank the companies you compare [see spreadsheet]

2. How would you estimate your company value given the ranking in relation to comparable companies? 

3. Which ratios are preferred for ranking?

4. Compare your ranking method and ratios to the Value Line System for ranking?  www.valueline.com