Unformatted text preview: trend and industry averages for the following ratios: current ratio, total assets turnover, net profit margin, and equity multiplier. For each ratio, analyze the 5-year trend of the ratio (is the companys ratio improving or deteriorating?) and compare the companys ratio to the industry ratio for the 5-year period (does the companys ratio compare favorably or unfavorably with the industry?). 2. Calculate the companys beta using regression analysis. Provide the R 2 statistic and the t-statistic for the beta coefficient. Based on the beta and the information from the Fama-French data, compute the stocks expected return using CAPM. 3. Using Valueline data, calculate the companys intrinsic value using the dividend discount model. Clearly identify the assumptions underlying your calculations, and provide a rationale for your valuation model choice. How does the current market price compare to your computed intrinsic valuation?...
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- Fall '08
- Standard Deviation, historical Portfolio Return, CRSP monthly return, variance-covariance matrix calculate, WRDS database