Trident University Stock and Bond Valuation SLP

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Question Description

Stock and Bond Valuation

For your second SLP assignment, continue to do research on the company you chose to write about for your Module 1 SLP. This time you will be doing research about the valuation of the company to try to determine if its stock price is overvalued or undervalued. You can use Google Finance, Yahoo Finance, or similar Web pages to find the financial information about this company.

Write a 2- to 3-page paper with the following items:

  1. What is the P/E ratio of this company? How does the P/E ratio compare to other companies in this industry? Based on the P/E ratio, do you think the company is overvalued or undervalued?
  2. Find the company’s balance sheet. Calculate the book value of each share. This can be done by taking the total assets and subtracting total liabilities. Then divide the number you get by the total number of outstanding shares. Is the number you get higher or lower than the current price of the share? Based on what you’ve found, would you say the stock is overvalued or undervalued?
  3. Finally, do a search on what different analysts have to say about your company. Do they generally recommend buying the stock or selling the stock? What reasons to they give for their assessment? Find at least three analyst reports about this company.

SLP Assignment Expectations

  • Answer the assignment questions directly.
  • Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.
  • For computational problems, make sure to show your work and explain your steps.
  • For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.


Module 2 - Background

Stock and Bond Valuation

Required Reading

Start off with these two tutorials that will give you an overview of the basic methods of valuing stocks and bonds from Subjectmoney:


Subjectmoney. (2013, January 2). How to price/value bonds - formula, annual, semi-annual, market value, accrued interest [Video file]. Retrieved from


Subjectmoney. (2013, January 3). Dividend discount model (DDM) - constant growth dividend discount model - how to value stocks [Video file]. Retrieved from

Now dig much deeper into bond and stock valuation with the following books chapters. They cover not only the computational methods but also provide a general overview of stock and bond markets:

Library books

Ross, S., Westerfield, R., & Jordan, B. (2007). Chapter 6: Interest rates and bond valuation. Essentials of Corporate Finance. McGraw Hill. Retrieved from http://novellaqalive2.mhhe.com/sites/dl/free/00700... [If this link is down, click Interest Rates and Bond Valuation for an alternative link.]

blue figures

Fabozzi, F. J., & Peterson Drake, P. (2009). Chapter 7: Asset valuation: Basic bond and stock valuation models. Finance: Capital markets, financial management, and investment management. Wiley. Available in the Trident Online Library.

Finally, for some examples of valuation calculations in Excel see the following videos:

Moy, M. (2014). Bond valuation in Excel. Retrieved from

Girvin, M. (2010). Stock valuation with dividend growth model. ExcellsFun. Retrieved from

Girvin, M. (2010). Stock value based on present value of future dividend cash flows. ExcellsFun. Retrieved from

Optional Reading

Davis, A. (2016). Bond pricing. Retrieved from

Ahmad, A. (n.d.). Bonds part II: Pricing. Coursera. Retrieved from https://www.coursera.org/learn/finance-markets/lec...

Ozoguz, A. (n.d.) Basics of equity valuation. Coursera. Retrieved from https://www.coursera.org/learn/global-financial-ma...

Vishwanath, S. (2007). Chapter 24: Debt markets. Corporate finance: Theory and practice. SAGE Publications India. Available in the Trident Online Library.

Tutor Answer

whgrab
School: Purdue University

check this

Running head: STOCK AND BOND VALUATION SLP

Stock and Bond Valuation SLP
Instructor name
Student name
Date

1

STOCK AND BOND VALUATION SLP

2

Introduction
P/E ratio or price to earning ratio is the relationship between the share price of the
organization and the earnings for sure. It gives an idea regarding what the market is ready to
pay for the earnings of the company. The earnings are important for the stock valuation
because the investors desire to know the profitability of the company. If the growth and the
level of earnings remain constant, then the price to earning ratio is considered as the number
of years it will take for an organization to pay back the amount paid for the stock. The paper
will analyze the profit to earning ratio of Samsung and comparison with other companies in
the industry, book value of each share to know the overvaluation or undervaluation of the
stock and opinion of different analysts regarding investment in the Samsung stock.
P/E ratio
The price to earning ratio of Samsung is 6.61. The high ratio means the investors
expect higher earnings which are not necessarily a better investment always. The low r...

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Review

Anonymous
Good stuff. Would use again.

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