Question: Hello, can you please help me with this? Can you please help with the following five parts? Part 1: (two paragraphs) Can you explain the
Hello, can you please help me with this?
Can you please help with the following five parts?
Part 1: (two paragraphs)
- Can you explain the three types of risk and beta, and how these concepts relate to a company's required rate of return.
Part 2: (two paragraphs)
- Can you help find Intel Corporation ticker symbol INTC, beta from a credible source.
- This can come from looking on a financial website like Yahoo! FinanceLinks to an external site..
- Can you compare Intel company's beta to the market beta of 1.0.
- Can you please calculate thecompany-specificrequired rate of return using the CAPMformula.
- Can you show all calculations.
- Can you use the beta you determined for your chosen company
- Can you Use a risk-free rate of 2.0%.
- For the market risk premium, please use the following assumptions:
- For a large capitalization company (greater than $10.0 billion in market capitalization) use 6.0% as the market risk premium.
- For a mid-cap company (between $2.0 billion and $10.0 billion in market capitalization) use 8.0% as the market risk premium.
- For a small-cap company (less than $2.0 billion in market capitalization) use 11.0% as the market risk premium.
- Can you compare the company-specific required rate of return you calculated to the required return based on size you used in Section 3: Dividend Analysis and Preliminary Valuation for the constant growth formula.
- Can you determine whether the company-specific required rate of return higher or lower than the rate of return based on size for the constant growth formula.
- Recall that in the required rate of return (r) was assumed to be:
- 12.0% for a large capitalization company.
- 15.0% for a mid-cap company.
- 18.0% for a small-cap company.
- Recall that in the required rate of return (r) was assumed to be:
- Can you please explain the difference in required rate of returns.
- Can you determine whether the company-specific required rate of return higher or lower than the rate of return based on size for the constant growth formula.
Part 3: (two to four paragraphs)
- Please recalculate the estimate of the stock price with the constant growth formula.
- Please Use the company's specific required rate of return you determined using the CAPM in Part 2 of this assignment.
- Can you review the selected growth rate.
- If the growth rate is higher than the new CAPM discount rate, you must reduce your selected growth rate.
- Your growth rate cannot be higher than the discount rate, because the calculations will result in a negative stock price, which is not meaningful.
- Include a short, written explanation to explain the revised growth rate.
- Please show your stock price calculation.
- Please compare the recalculated stock price to the current stock price per share of the company.
- Please state whether the recalculated stock price is above or below the current market price.
- Please state whether the recalculated stock price indicates if the stock price is currently under-valued or over-valued in the market.
- can you state your recommendation for your concluded stock price for the company.
- Can you Use either the stock price from the constant growth formula using the CAPM required rate of return or the current market price.
- Please justify the conclusion of value for INTEL stock based on the most important financial facts.
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