W4P1

Resources: Stock Valuation Template

Calculate the following stock valuation problems:

  • Company X is paying an annual dividend of $1.35 and has decided to pay the same amount forever. How much should you pay for the stock, if you want to earn an annual rate of return of 9.5% on this investment?
  • You want to purchase common stock of Company X and hold it for 7 years. The company just announced they will be paying an annual cash dividend of $6.00 per share for the next 9 years. How much should you pay for the stock, if you will be able to sell the stock for $28 at the end of seven years and you want to earn an annual rate of return of 11% on this investment?

Select one of the companies studied by one of the group members in Week 3.

Search the Internet for financial information about the company selected.

Evaluate the following in a 525-word response:

  • Characteristics of common and preferred stock.
  • How stock markets work.
  • The connection between the value of shares and dividends.
  • Mention the ticker symbol of the company studied, the current price of the stock, and its financial history.
  • Indicate if you would recommend investing in this stock and why. Explain.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

  • attachment

    FIN419_r6_wk4_Stock_Valuation_Template.xlsx