Question: In this discussion, we will continue exploring your selected company. In your initial post, discuss how you feel about the overall economy, the company's industry,
In this discussion, we will continue exploring your selected company. In your initial post, discuss how you feel about the overall economy, the company's industry, and the performance of the company over the next year. Then, calculate the expected rate of return you predict for the company's stock. Finally, use this expected rate of return to predict the company's future stock price. (Multiply the current stock price by this expected rate of return.) Be sure to include your work in your initial post. In response to your classmates, consider the different predictions for the economy and company performance in the posts. Then, discuss the implications of how this uncertainty impacts financial concepts such as rate of return. Please see the example below to calculate the expected rate of return when calculating the companys future stock price. You would use your own rates of return and probabilities of occurrence: The formula for expected rate of return is Er = r1 * Pb1 + r2 * PB 2 + rn * pbn. Rate of Return Probability of Occurrence (The total of the probability of occurrence must equal 100%) 3% 30% 4% 70% Calculation of Expected Rate of Return (.03 x .30) + (.04 x .7) .009 + .028 = .037 = 3.7% Coca-Colas current stock price is $41.61 __________________________________________ $41.61 x 1.037 = $43.15 This is the projected stock price.
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