I need some help with knowing where to start.

Stock Valuation, the WACC and the CAPM

In this assignment you will compute the intrinsic value of two stocks and compare the values to the reported market stock price in order to determine if the stock is undervalued or overvalued.

You should do the following:

• Select any two U.S. public companies that pay dividends (required to use the dividend discount model)
• Compute each stocks required rate of return using the Capital Asset Pricing Model (Chapter 10).
• Compute the current period WACC for the selected firms
• Compute the intrinsic stock price using the Discounted Dividend Model (Chapter 9)
• Discuss whether the stocks are undervalued or overpriced.
• Discuss the models used and their limitations, if any.
• Extract analysts opinions of the firms stock value from available sources and compare to your results
• Discuss the discrepancies between the computed and actual stock prices.

Conclude the project by making recommendations based on your findings. Does it make economic sense to purchase the stocks given the intrinsic values, financial health of the companies, and the industry outlook? You must use logic and objective argument to support your decision. Be sure to comment or discuss limitations of your recommendation, if any.

Your paper should meet the following requirements:

• Be well written
• Double-spaced, 12 point font
• You should include a title page, a reference section and an appendix with your embedded Excel file
• Be 5 to 8 pages in length for the analysis and explanations (this does not include the cover page, reference page, or appendices
• Include Excel spreadsheet with all computations; this spreadsheet should be embedded in the Word document as an appendix after your analysis and explanations
• Include a minimum of three credible references