please answer b & c based on the info from Amazon stock ...

90.2K

Verified Solution

Question

Finance

please answer b & c based on the info from Amazon stock image
A. Choose a stock that interests you. Utilizing Bloomberg, Yahoo Finance, or Google Finance, etc. as a source of data, collect the following information: a. The stock's Beta 1.25 b. Use the lyr market risk premium from Kenneth French's website 5.9% c. The risk-free rate ( r RF) 1.6% d. The last dividend paid (D0) e. The annual expected growth rate of dividends (g) 9.86% B. Use the Discounted Dividend Model for Constant Growth Stocks and solve for the intrinsic stock price (P0) Based on your above calculations, compare the calculated price with the current market price and indicate whether the stock price is overvalued, undervalued, or at equilibrium? Explain. C. Now, assume that your company has just released a new product and will be experiencing supernormal growth of 25% for the next three years. In Excel, use the information in "A" and the Discounted Dividend Model for Nonconstant Growth

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students