-You're a financial advisor and one of your clients comes to you for advice. He wants
to invest in company XYZ. What would be your first steps in order to help your
-After taking those required steps you investigate the financial data, finding out that
the current stock price is $180.00.
- The company has grown at an average of 3% for
the past 10 years.
-The current rate of inflation is 2% and the current 30-year bond
yield 9risk free rate) is 2%.
-The most recent information from the 2017 statement of
cash flows, indicates a $1.5 billion in capital expenditures, $4.8 billion in cash from
operating activities and $990 million from investing activities, $300 Million in
Dividends and there are 650 million shares outstanding.
- Using the DCF valuation method, produce an excel sheet, what would you recommend to your client and why?
-Is it worth investing?