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Hello, I need help with my economics assignment. This assignment aims to learn h
Hello, I need help with my economics assignment. This assignment aims to learn how to apply stock valuation techniques to real financial data utilizing an online database. My company is Comcast (CMCSA).
Directions:
I will provide the constant growth model fundamental report using the stated CAGR from the graph as the growth rate (g) for your Constant Growth Model valuation. Assume a 10.5% discount rate (R). Calculate an estimated value of a share of the stock using the Constant Growth Model equation. By using the historical rate of growth in the dividend, the assumption is that the company will sustain its recent rate of dividend growth into the future.
For the Stock Valuation, I will provide information on that as well. I provided the PDF document below – In the Ratios and Statistics section, retrieve the Forward P/E as an input for your Stock Valuation Using Multiples. Record the Average Target Price and the direction it has taken during the last four weeks (raised or lowered, indicated by orange/green arrows). In the Consensus Summary the company’s annual Earning Per Share appear, both Actual (A) and as Estimated by analysts (E). Historical results (A) by year should be evaluated versus full year estimates for future periods (E). This data appears in the Consensus Estimates Summary by period. Calculate an estimated value of a share of the stock using multiples as determined by Eq. 8-8 in the e-book. Use the Forward P/E as the Benchmark PE in the model. Calculate the estimated value for each year that a Consensus Estimate of Earnings per Share appears in Mergent. For example, suppose the Forward P/E is 27 and there are Consensus Estimates of $2.06 in 2021E and $2.25 in 2022E. According to the model, P1 would be $55.62 and P2 would be equal to $60.75. As described in the text, forecasted prices such as these are called Target Prices.
For current stock price – I provided the document for comparisons as well.
Write a 3-4 page paper (approximately 600 words) in APA format that includes:
A brief description of the company: Which company did you choose and why is it of interest? Does it manufacture interesting products or provide innovative services? Have recent news events brought this company to your attention?
A compare and contrast of the estimated stock value from your Constant Growth Model to the current stock price.
Your calculations from the Constant Growth Model along with the current stock price.
A paragraph on changes to the inputs that would allow your Constant Growth Model to provide a value consistent with the current stock price. What change in the dividend growth rate could be used to equate to the current stock price with the discount rate provided? Would a change in the discount rate, higher or lower, influence the valuation? How?
An explanation as to why the estimated stock price from your Constant Growth Model should or should not be relied upon given the inputs you used.
Refer to the observations made in Action Item 4 regarding analyst Average Target Price and Recommendations. Is there a clear recommendation? Your response will demonstrate that you have examined the Broker Summary in Mergent.
A compare and contrast of the Target Prices from your Stock Valuation Using Multiples to the current stock price. Show your calculations along with the current stock price.
Answers to the following:Would you invest in this stock? Why or why not?
Based on your valuations in the Research Project, would you characterize your stock as undervalued or overvalued? Explain.
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