Prompt: This milestone involves creating a draft of the stock analysis and portfolio development sections of the final project. Use the provided spreadsheet to calculate your portfolio's standard deviation. Specifically, the following critical elements must be addressed: II. Stock Analysis: In this section, you will select five stocks from the provided list and determine their values by applying an appropriate valuation model from the following options: price to multiple model (earning or sales), dividend valuation model, or free cash flow model. A. Determine the value of each stock by using an appropriate model based on the characteristics provided for each stock; use each model at least once. B. Provide a rationale for the stock valuation method you chose for each stock. Cite specific information to support your decisions. C. Using the calculated valuation, the current market price, and historical performance, determine the expected return for each stock. III. Portfolio Development: In this section, you will develop a portfolio for both clients based on their risk tolerance, return objectives, and liquidity objectives. You will select appropriate assets from the provided list. A. For each client, develop a portfolio from the list of assets provided that is informed by your analysis of each clients objectives and (if applicable) the stock valuation you determined. B. For each portfolio, calculate the expected portfolio return using the CAPM (beta) model. C. For each portfolio, calculate the expected portfolio standard deviation

Portfolio Development: In this section, you will develop a portfolio for both clients based on their risk tolerance, return objectives, and liquidity objectives. You will select appropriate assets from the provided list. A. For each client, develop a portfolio from the list of assets provided that is informed by your analysis of each clients objectives and (if applicable) the stock valuation you determined. B. For each portfolio, calculate the expected portfolio return using the CAPM (beta) model. C. For each portfolio, calculate the expected portfolio standard deviation.

	Standard Deviation	Portfolio Weight
IBM	20.0%	0%
KO	13.0%	0%
BMY	28.0%	0%
ORCL	16.0%	0%
MMM	14.0%	0%
BAX	16.0%	0%
BIG	32.0%	0%
NFLX	45.0%	0%
AKAM	37.0%	0%
GE	16.0%	0%
SPY	11.0%	40%
IWM	18.0%	20%
EFA	15.0%	20%
EEM	19.0%	0%
SHY	1.0%	0%
IEF	6.0%	0%
TLT	13.5%	0%
LQD	6.0%	20%
HYG	8.0%	0%
		100%
Portfolio Standard Deviation	13.13%

Models in Text (Chapter 8) to Choose From

Dividend Valuation Models

Zero Growth Dividend Valuation Model

Constant Growth Dividend Valuation Model

Variable Growth Dividend Valuation Model

Free Cash Flow (FCF) to Equity Methods

Zero Growth in Free Cash Flow to Equity Method

Constant Growth in Free Cash Flow to Equity Method

Variable Growth in Free Cash Flow to Equity Method Price-Relative Procedures

Price-to-Earning (P/E) Approach

Price-to-Cash-Flow (P/CF) Procedure

Price-to-Sales (P/S) Ratio

Price-to-Book-Value Ratio

Symbol	Estimated Beta	Dividends	Earnings	Sales	Free Cash Flow	5-Year Dividend Growth	Average Industry P/E Ratio	Average Industry P/S Ratio	Free Cash Flow Growth
IBM	0.86	Use Last Year	Use Last Year	Use Last Year	Use Last Year	13.7	23.7	1.12	2.60%
KO	0.66	Use Last Year	Use Last Year	Use Last Year	Use Last Year	8.3	22.6	2.2	6.50%
BMY	0.78	Use Last Year	Use Last Year	Use Last Year	Use Last Year	2.9	24.4	3.37	N/A
ORCL	1.1	Use Last Year	Use Last Year	Use Last Year	Use Last Year	21.1	20.5	4.45	10%
MMM	0.98	Use Last Year	Use Last Year	Use Last Year	Use Last Year	15.1	23.8	2.59	7%
BAX	0.75	Use Last Year	Use Last Year	Use Last Year	Use Last Year	-16.9	36.09	3.68	N/A
BIG	1.04	None	Use Last Year	Use Last Year	Use Last Year	N/A	23	1.12	N/A
NFLX	1.57	None	Use Last Year	Use Last Year	Use Last Year	N/A	52.5	6	N/A
AKAM	1.34	None	Use Last Year	Use Last Year	Use Last Year	N/A	41.8	3.58	17%
GE	1.12	Use Last Year	Use Last Year	Use Last Year	Use Last Year	9.7	23.8	2.59	N/A