How decisions can be analyzed in terms of alternative course

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Assignment: Application - Stock Valuation

As a manager, it is important to understand how decisions can be analyzed in terms of alternative courses of action and their likely impact on a firm's value. Thus, it is necessary to know how stock prices can be estimated before attempting to measure how a particular decision might affect a firm's market value.

To prepare for this Assignment, choose a publicly-traded company, and then estimate your company's common stock price, using one of the valuation models presented in the assigned readings or outside readings. (If you want to analyze a dividend paying company, you can find a robust list at https://www.dividenddetective.com/big_dividend_list.htm.)

https://www.dividenddetective.com/big_dividend_list.htm

In addition, here is a template you will find to be useful for the assignment. It matches the examples given in the textbook on stock valuation models in Chapter 9: Stock Models (Excel workbook)

Stock Models (Excel workbook)

Defend your choice of model, and explain why it is appropriate to use for your company's stock. Be sure to explain how you arrived at any assumptions regarding values used in the model. Determine whether your company appears to be correctly valued, overvalued, or undervalued based on your company's stock current price and model result. Check Yahoo Finance for current stock prices. Finally, explain why your company's stock appears to be over-, under-, or correctly valued.

Reference no: EM131386272

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