1- Choose 2 firms that interest you and download their financial statements from any of these...

 

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1- Choose 2 firms that interest you and download their financial statements from any of these Web sites: finance.yahoo.com, finance.google.com, or money.msn.com. a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividends per share, and the net income. Record them in a spreadsheet (EXCEL). b. Calculate the total amount of dividends paid (Dividends per share x Number of shares outstanding), the dividend payout ratio (Total dividends paid/Net income), and the plowback ratio (1 - Dividend payout ratio). c. Compute the sustainable growth rate, g = b x ROE, where b equals the plowback ratio. 2- Now calculate the intrinsic value of the firms you selected? You can find the required return (k) on each firm based on the CAPM. Make reasonable judgments about the market risk premium and the risk-free rate (you can find them online) Also, You can find the beta of each firm from its Statistics page. 1- Choose 2 firms that interest you and download their financial statements from any of these Web sites: finance.yahoo.com, finance.google.com, or money.msn.com. a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividends per share, and the net income. Record them in a spreadsheet (EXCEL). b. Calculate the total amount of dividends paid (Dividends per share x Number of shares outstanding), the dividend payout ratio (Total dividends paid/Net income), and the plowback ratio (1 - Dividend payout ratio). c. Compute the sustainable growth rate, g = b x ROE, where b equals the plowback ratio. 2- Now calculate the intrinsic value of the firms you selected? You can find the required return (k) on each firm based on the CAPM. Make reasonable judgments about the market risk premium and the risk-free rate (you can find them online) Also, You can find the beta of each firm from its Statistics page.

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Here is a general outline of the steps you can follow 1 Obtain the financial statements Go to the fi... View the full answer