This exercise involves selecting an existing organization and determining whether its market price per share is appropriate. The student will develop an environmental scanning analysis to establish the context for determining for the company, its cash flow, growth rate, and discount rate. The student will use a discounted cash flow technique as well as relative valuation for determining the value of the company's common stock.
The specific components of the assignment should include:
1. A description of the company and why the company was selected.
2. An environmental scan and risk analysis in the context of the selected company.
3. A discussion of how the cash flow, growth rate, and discount rate were determined.
4. Implementation of the discounted cash flow valuation method.
5. A description of why the comparable companies were selected for implementation of the relative valuation method.
6. Implementation of the relative valuation method.
7. Recommendation of whether or not the company's stock should be bought.
The written paper is to be typed single-spaced, 1' margins, Times New Roman and 12-point font, page length between 8-15, with correct spelling and grammar, proper citation (APA format), references, a cover page, and organization with headings. The instructor's approval of the topic is required.