1. Stock Analysis In this section, you will select five stocks from the provided list and determine their values by applying an appropriate valuation model from the following options: price to multiple model (earning or sales), dividend valuation model, or free cash flow to equity valuation model.
   1. Determine the value of each stock by using an appropriate model based on the characteristics provided for each stock; use each model at least once.
   2. Provide a rationale for the stock valuation method you chose for each stock. Cite specific information to support your decisions.
   3. Using the calculated valuation, the current market price, and historical performance, determine the expected return for each stock.

Symbol	Estimated beta	Dividends per share - Annual	Earnings per share - Annual	Sales per share - Annual	Free cash flows per share - Annual	5 year dividend growth	Average industry PE ratio	Average industry P/S ratio	Free cash flow growth
IBM	0.86	6.59	1.8	66.35	9.28	13.7%	23.7	1.12	2.6%
KO	.66	1.76	2.19	9.89	2.19	8.3%	22.6	2.2	6.5%
BMY	.78	2.19	2.95	21.51	5.57	2.9%	24.5	3.37	N/A
ORCL	1.1	1.28	2.41	15.23	1.81	21.1%	20.5	4.45	10%
NFLX	1.57	NONE	9.95	70.06	3.59	N/A	52.5	6	N/A

Market return = 13.5% and the Risk Free Rate is 3.5%

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Answer rating: 100% (QA)

Stock Valuation and Expected Return Analysis Based on the characteristics provided heres the valuation method chosen rationale and expected return for ... View the full answer