1. Valuation. Prepare a valuation table like the one below. If you know how to use a Bloomberg terminal this will be particularly simple. If not, all the information can acquired online. For example, the pricing information can be acquired from Yahoo Finance at www.finance.yahoo.com (Links to an external site.). Enter each company into the quote lookup box on the right and fill in their price. Then go to the analysis tab and fill in the earnings estimates for EPS1, the current year, and EPS2, next year. In your excel sheet, calculate the PE1 and PE2 ratio. If you have difficulty, review the chapter I wrote for you on equity valuation.

Company EPS1 EPS2 PE1 PE2 Tesla Ford GM Ferrari Stellantis

Company	EPS1	EPS2	PE1	PE2
Tesla
Ford
GM
Ferrari
Stellantis

Discuss the valuation of Tesla compared to the peers identified. Do you think these are the right peers? If not, explain why not. If so, explain.

2. Extended Valuation. Now, extend your valuation by creating another valuation table. Remember that market capitalization is the number of shares times the share price. It is readily available for each stock you enter on the company's page in yahoo finance. Enter the market capitalization, which is a company's equity market value. Now find the number of cars produced by each company in the year 2000. Calculate each company's market cap divided by the cars they produce. Now do the same thing with number of employees.

Company	Market Cap	Employees	Cars Produced	Cars Per Employee	Mkt Cap Per Car
Tesla
Ford
GM
Ferrari
Stellantis

Using the numbers in this extended valuation, explain your observations. How do these numbers help or hinder your understanding of whether Tesla is undervalued or overvalued.