Fin250 Investment P/E Ratio Week 7 Discussion

Anonymous
timer Asked: Oct 18th, 2018
account_balance_wallet $9.99

Question Description

I have completed most of the data, I need everything in red (the math & comments) completed. Please finish the math for each scenario based on the information I have already started.

I have labeled my stock as “choice,” the competitor stock as “peer,” the industry information as “industry.”

Comment on each “choice and peer” findings. Based on the P/E ratio, do you believe your choice stock to be fairly priced, a value or overpriced as compared to a peer and the industry as a whole? Why?

**The comment does not need to be long and drawn out, just answer the questions above**.

I have attached the word doc with what I have done and what needs to be finished.

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I have completed most of the data, I need everything in red (the math & comments) completed. Please finish the math for each scenario based on the information I have already started. I have labeled my stock as “choice,” the competitor stock as “peer,” the industry information as “industry.” Comment on each “choice and peer” findings. Based on the P/E ratio, do you believe your choice stock to be fairly priced, a value or overpriced as compared to a pe er and the industry as a whole? Why? Choice: Netflix Inc. (NMS: NFLX) | Industry: Video tape & disc rental P/E Ratio = Netflix stock price on 10/16/18 closed at $346.40. Seven weekdays earlier, on 10/08/18, it closed at $ 349.10. If I had bought 100 shares of Netflix stock on 10/08/18 at $349.10 and sold them on 10/16/18 at $346.40, I would have earned $270 before taxes, which is 0% rate of return. The calculation is ($349.10 – $346.40) / $349.10 x 100 = 0%. Netflix’s stock priced closed on 10/16/15 at $98.99. The three–year rate of return is 0%. Peer: Disney (Walt) Co. (NYS: DIS) | Industry: Cable & other pay TV services P/E Ratio = Disney stock price on 10/16/18 closed at $116.19. Seven weekdays earlier, on 10/08/18, it closed at $116.02. If I had bought 100 shares of Disney stock on 10/08/18 at $116.02 and sold them on 10/16/18 at $116.19, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Disney stock priced closed on 10/16/15 at $108.24. The three–year rate of return is 0%. Comment: Choice: Microsoft Corp (NMS: MSFT) | Industry: Prepackaged software, software publishers P/E Ratio = Microsoft stock price on 10/16/18 closed at $111.00. Seven weekdays earlier, on 10/08/18, it closed at $110.85. If I had bought 100 shares of Microsoft stock on 10/08/18 at $110.85 and sold them on 10/16/18 at $111.00, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Microsoft stock priced closed on 10/16/15 at $47.51. The three–year rate of return is 0%. Peer: Red Hat Inc (NYS: RHT) | Industry: Prepackaged software, software publishers P/E Ratio = Red Hat Inc stock price on 10/16/18 closed at $125.60. Seven weekdays earlier, on 10/08/18, it closed at $125.00. If I had bought 100 shares of Red Hat Inc stock on 10/08/18 at $125.00 and sold them on 10/16/18 at $125.60, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Red Hat Inc stock priced closed on 10/16/15 at $77.62. The three–year rate of return is 0%. Comment: Choice: Dunkin Brands Group Inc (NMS: DNKN) | Industry: Eating places P/E Ratio = Dunkin’ Brands Group stock price on 10/16/18 closed at $74.19. Seven weekdays earlier, on 10/08/18, it closed at $71.53. If I had bought 100 shares of Dunkin’ Brands Group stock on 10/08/18 at $71.53 and sold them on 10/16/18 at $74.19, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Dunkin’ Brands Group stock priced closed on 10/16/15 at $47.51. The three–year rate of return is 0%. Peer: Starbucks Corp. (NMS: SBUX) | Industry: Eating places P/E Ratio = Starbucks stock price on 10/16/18 closed at $57.81. Seven weekdays earlier, on 10/08/18, it closed at $56.54. If I had bought 100 shares of Starbucks stock on 10/08/18 at $56.54 and sold them on 10/16/18 at $57.81, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Starbucks stock priced closed on 10/16/15 at $42.67. The three–year rate of return is 0%. Comment: Choice: Ford Motor Co. (DE) (NYS: F) | Industry: Motor vehicles & car bodies P/E Ratio = Ford Motor Co. stock price on 10/16/18 closed at $8.80. Seven weekdays earlier, on 10/08/18, it closed at $9.26. If I had bought 100 shares of Ford Motor Co. stock on 10/08/18 at $9.26 and sold them on 10/16/18 at $8.80, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. Ford Motor Co. stock priced closed on 10/16/15 at $15.28. The three–year rate of return is 0%. Peer: General Motor Co. (NYS: GM) | Industry: Motor vehicles & car bodies P/E Ratio = General Motor Co. stock price on 10/16/18 closed at $32.34. Seven weekdays earlier, on 10/08/18, it closed at $34.25. If I had bought 100 shares of General Motor Co. stock on 10/08/18 at $34.25 and sold them on 10/16/18 at $32.34, I would have earned $0.00 before taxes, which is 0% rate of return. The calculation is ($0.00 – $0.00) / $0.00 x 100 = 0%. General Motor Co. stock priced closed on 10/16/15 at $33.15. The three–year rate of return is 0%. Comment: Reference: Keown, A. J. (2016). Personal Finance Turning Money into Wealth (7th ed.). Pearson. Mergent Online (2018). Equity Pricing. Retrieved from http://www.mergentonline.com.ezproxy.snhu.edu/companydetail.php?compnumber=248 8&pagetype=synopsis ...
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Tutor Answer

PerfectGrade
School: Duke University

Buddy, I have uploaded the complete paper 5 hours before deadline to allow you to review it early enough. If you have any question, let me know.

I have completed most of the data, I need everything in red (the math & comments)
completed. Please finish the math for each scenario based on the information I have
already started.
I have labeled my stock as “choice,” the competitor stock as “peer,” the industry
information as “industry.”
Comment on each “choice and peer” findings. Based on the P/E ratio, do you believe
your choice stock to be fairly priced, a value or overpriced as compared to a pe er and
the industry as a whole? Why?
Choice: Netflix Inc. (NMS: NFLX) | Industry: Videotape & disc rental
P/E Ratio = 130.16
Netflix stock price on 10/16/18 closed at $346.40. Seven weekdays earlier, on 10/08/18, it closed
at $ 349.10. If I had bought 100 shares of Netflix stock on 10/08/18 at $349.10 and sold them on
10/16/18 at $346.40, I would have earned $270 before taxes, which is 0.773% rate of return. The
calculation is ($349.10 – $346.40) / $349.10 x 100 = 0.773%. Netflix’s stock priced closed on
10/16/15 at $98.99. The three–year rate of return is 249.93%. Netflix Inc. stock has realized an
immense growth over time which indicates how the company has grown to be among the bestperforming stocks. The Netflix Inc. stock is lucrative to invest in since the company has growth
characteristic and hence more value can be realized over time. The stock is correctly valued.
Peer: Disney (Walt) Co. (NYS: DIS) | Industry: Cable & other pay-tv services
P/E Ratio = 16.245
Disney stock price on 10/16/18 closed at $116.19. Seven weekdays earlier, on 10/08/18, it closed
at $116.02. If I had bought 100 shares of D...

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