FAANG stocks:Facebook, Amazon,Apple, Netflix, and Google (now Alphabet).In particular, we are interested in (i) applying the valuation by comparables methodology, and (ii) determining the present value (PV) of growth opportunities entailed by each stock.

The following questions should be addressed in this assignment:

1. UsingYahoo! Finance, calculate or look up the (forward) P/E (price-earnings) value ratios for each of the FAANG stocks. Rank the five companies based on their P/E ratios, explaining possible reasons behind differences in the ratios (please make sure to mention the company with the most valuable growth opportunity).
2. Obtain an estimate of the future EPS (earnings per share) for each of the FAANG stocks. Based on the P/E averages of the industries that each of them belong to (to be obtained fromDamodaran's website), calculate the theoretical price of each stock. Are the theoretical prices similar to the market prices? Explain the reasons behind differences observed.