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Category: Homework
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Experience:  Masters
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# Matrix please do this for me, need by Sunday evening 8pm est

### Customer Question

Matrix please do this for me, need by Sunday evening 8pm est please

By walking through a set of financial data for XYZ, this assignment will help you better understand how theoretical stock prices are calculated and how prices may react to market forces such as risk and interest rates. You will use both the CAPM (capital asset pricing model) and the constant growth model (CGM) to arrive at XYZ's stock price.

To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.

Assignment Guidelines:

Find an estimate of the risk-free rate of interest (krf). To obtain this value, go to Bloomberg.com(http://www.bloomberg.com/markets/): Market Data and use the "U.S. 10-year Treasury" bond rate (middle column) as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 9.00%.
Using the information from the XYZ Stock Information document, record the following values:
XYZ's beta (ß)
XYZ's current annual dividend
XYZ's 3-year dividend growth rate (g)
Industry P/E
XYZ's EPS
With the information you recorded, use the CAPM to calculate XYZ's required rate of return (ks).
Use the CGM to find the current stock price for XYZ. We will call this the theoretical price (Po).
Now use the XYZ Stock Information (http://class.aiuniv.edu/LCMSFileShareCommon/bb4/f55/18b/b6a/46c/582/a5d/8fe/c39/baa/7e/FINA310_U3_f1.pdf)
to find XYZ's current stock quote (P). Compare Po and P and answer the following questions:
Are there any differences?
What factors may be at work for such a difference in the two prices?
Now assume the market risk premium has increased from 9.00% to 12% and this increase is due only to the increased risk in the market. In other words, assume the krf and the stock's beta remain the same for this exercise.
What will the new price be? Explain.
Recalculate XYZ's stock price using the P/E ratio model and the needed info found in the XYZ Stock Information file.
Why is the present stock price different from the price arrived at using CGM (Constant Growth Model)?
If you used Microsoft Word to arrive at your answers, then you must provide an explanation of the formulas and calculations.

Your submitted assignment (125 points) must include the following:

A double-spaced Word document of 2–3 pages that contains the following:
All of the numerical values listed in the assignment guidelines.
The formulas and calculations that you used to arrive at your answers
You must include your explanation of how you used Microsoft Excel for your calculations if applicable.

You will be graded on the accuracy of your value calculations as well as your demonstrated understanding of CAPM, CGM, and stock analysis.

Submitted: 2 years ago.
Category: Homework
Expert:  Matrix replied 2 years ago.
Thanks...Gary...I will work on this...
Expert:  Matrix replied 2 years ago.
Do you want me to use any course book in the reference?
Customer: replied 2 years ago.
You don't need to.
Expert:  Matrix replied 2 years ago.
I will submit in 10 min.
Expert:  Matrix replied 2 years ago.
Matrix, Tutor
Category: Homework
Satisfied Customers: 419
Experience: Masters
Expert:  Matrix replied 2 years ago.
Hi Gary,

Is there anythign else I can help this week?

Thanks,
Matrix
Customer: replied 2 years ago.
Sure I will post early am. I'm mobile on my phone.
Customer: replied 2 years ago.
I posted one for you yesterday and another guy picked it up and has left me hanging. Can you save me here. \$50 bonus! He has not responded.
Expert:  Matrix replied 2 years ago.

I will do that in 2-3 hours. You can tell him that other expert is working to avoid confusion.

Customer: replied 2 years ago.
I told him that. Thank you. I will reward you with a \$50 bonus. I just need by 9 pm est. thanks!
Expert:  Matrix replied 2 years ago.
I started working. Somehow I didn't get mail of new request as it seems there is some change going on in JA website.
Customer: replied 2 years ago.
I'll take care of ya.
Customer: replied 2 years ago.

Do you need me to do anything else on my end for you to be able to take over the assignment?

Expert:  Matrix replied 2 years ago.
I am done with calculation. I am preparing Microsoft Document in APA format. I will submit the paper in 30 to 45 minutes.
Customer: replied 2 years ago.

I have to run to the store I'll be back in about 2 hours.

Expert:  Matrix replied 2 years ago.

You need to spend \$3 to view this post. Add Funds to your account and buy credits.
Matrix, Tutor
Category: Homework
Satisfied Customers: 419
Experience: Masters
Expert:  Matrix replied 2 years ago.

I can access homework and writing category. I am not able to access the current question.

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