For American Airlines Stock: NYSE:AAL

4. Find the beta for your stock and use the information below to calculate the required rate of return using the CAPM. Use this return in your valuation model.

5) Use the appropriate dividend or price/earnings (P/E) model to develop a valuation (price) of the stock. Compare your valuation with the current market price and comment on why any discrepancies may exist.

6) Assume your valuation is the intrinsic value of the stock which will be reached in one year. Using the market price today, your valuation estimate and any dividends you expect will be paid, find the return on the stock if you bought it today (the date you are doing the analysis). Using the S&P 500 index return and the beta for your stock, use the capital asset pricing model to estimate the required rate of return for your stock.

7) Based on your analysis, explain why you would or would not invest in the stock.Use the following information for market returns and risk free rates.20 year average return for the S&P 500 Index:7.07% (w/dividends reinvested)10 year average return on 90 day Treasury bills: 1.84%