--%>
Assignment Help - homework help

What is the current example of a value company

What is the current example of a value company and would you buy it as an investment. Why or why not?

E

Expert

Verified

An illustration of a value company would be Altria/Phillip Morris. Its its dividend is high, it is in saturation phase and not expected to grow much in future. Management there does not add a whole lot of value, and earnings do not have a lot of expected progress.

I would invest in its stock because historically the value stock have been seen to outperform the growth stocks. The claim that value stocks produce higher returns than growth stocks over time has been borne out by many studies. These studies objectively identify value stocks in slightly different ways, all of which are valid. Some studies advocate stocks with low P/E (price to earnings) ratios. The Other studies advocate buying stocks with high ratios of book value to the market value. Still others advocate purchasing stocks with high dividend rates. These are all different methods of identifying value stocks. All produce similar results when applied consistently over long periods of time.

   Related Questions in Corporate Finance

  • Q : What are the different types of

    What are the different types of mathematics found in quantitative finance?

    		•
  • Q : Intrnational financer what are the

    what are the objectives of international finance

    		•
  • Q : Define stock variable Stock variable :

    Stock variable: It is a variable whose value is measured or evaluated at a point of time.

    		•
  • Q : Define the term Stock Market crash

    Stock Market Crash was responsible for the Great Depression. Middle class families lost all their savings as they had gambled the market on margin.Those banks which were under the loan ofbrokers’ started removing money out of the savings account

    		•
  • Q : DCF Analysis AB Corp. is in the

    AB Corp. is in the business of making white-board markers. They are computing the potential of investing in some new equipment that will enhance their manufacturing process.  The initial cost of the latest machinery is $470,000 plus a one-time installation cost o

    		•
  • Q : Define Cash to cash cycle Cash to cash

    Cash to cash cycle: The concept of cash to cash cycle is financial performance standard, which is associated with the management of a firm’s working capital. The definition of cash to cash or cash conversion cycle is “the length of time a

    		•
  • Q : What are Stock exchanges Stock

    Stock exchanges: A stock exchange provides services useful for trading, issue and redemption of shares and other securities for traders and brokers. They will also provide facility for payment of income and dividends for listed securities. Securities

    		•
  • Q : Effective annual yield problem Stanley

    Stanley invested in a municipal bond which promised an annual yield of 6.7 %. The bond pays coupons twice a year. What is the effective annual yield (abbreviated as EAY) on this investment? (1) 13.4%  (2) 6.81%  (3) 6.70%  (4) None of the above

  • Q : Using the DCF method Your Corp, Inc.'s

    Your Corp, Inc.'s data is as follows:Beta; 1.30Recent dividend; $.90Expected dividend growth; 7%Expected return of the market; 14%Treasury Bills are yielding; 4%Most recent stock price; $65 A] Us

    		•
  • Q : Is cash flow is a flow of cash to

    The often known as "cash flow" that is net income plus depreciation, is a flow of cash, but is this a flow to the company or to the shareholders?

    		•