Stock Valuation and Financial Analysis of a Moderately Growing Company
An assignment focusing on financial analysis and stock valuation of a company experiencing moderate growth.
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Analysis of Stock Price
The company analyzed has expected cash flow of $ 320 million in 2009 and it is expected
to reach $ 350 million in 2010. Company under evaluation is moderate growth stock its growth
rate of its cash flows is calculated as
Year Cash Flow Cash flow growth rate
Final year cash flow - initial
year cash flow/ initial year
cash flow
2009
$
325.00
2010
$
350.00 7.69%
2011
$
400.00 14.29%
2012
$
425.00 6.25%
2013
$
450.00 5.88%
All figure in $
millions
As this publically traded addresses efficient market hypothesis it means all the internal
and external information about the company is in public domain.
Analyzing summary of information of company’s stock
52-week range: High 75 Low 35
52 week range denotes the range of the company’s share price in last one year
52 week high is the maximum price at which stock of the company has traded in past one
year so 52 week high of 75 means maximum share price of this company in last one year is 75.
The company analyzed has expected cash flow of $ 320 million in 2009 and it is expected
to reach $ 350 million in 2010. Company under evaluation is moderate growth stock its growth
rate of its cash flows is calculated as
Year Cash Flow Cash flow growth rate
Final year cash flow - initial
year cash flow/ initial year
cash flow
2009
$
325.00
2010
$
350.00 7.69%
2011
$
400.00 14.29%
2012
$
425.00 6.25%
2013
$
450.00 5.88%
All figure in $
millions
As this publically traded addresses efficient market hypothesis it means all the internal
and external information about the company is in public domain.
Analyzing summary of information of company’s stock
52-week range: High 75 Low 35
52 week range denotes the range of the company’s share price in last one year
52 week high is the maximum price at which stock of the company has traded in past one
year so 52 week high of 75 means maximum share price of this company in last one year is 75.
52 week low means that minimum price at which stock of the company has traded in past
one year so 52 week low of 35 means minimum share price of this company in last one year is
35.
Calculation of 52 week range
52 week range is calculated by analyzing company’s stock price history of past one year
and then identifying the maximum and minimum stock price during the period of evaluation.
Current stock price
Current stock price is the price at which stock of the company is currently trading. It is
also known as market value of stock.
Calculation of Current stock price
Current stock price is price at which current supply and demand curve for that stock are
in equilibrium. It can generally be obtained from market data available on various online
databases like Yahoo Finance or Factiva. Current price of 60 denotes that currently stock of
company is trading at $ 50.
Dividend Yield
Dividend yield is defined as return on investment share holder is getting through the
payment of cash dividend.
Calculation of Dividend Yield
Dividend yield is calculated by dividing dividend paid per share with current stock price.
one year so 52 week low of 35 means minimum share price of this company in last one year is
35.
Calculation of 52 week range
52 week range is calculated by analyzing company’s stock price history of past one year
and then identifying the maximum and minimum stock price during the period of evaluation.
Current stock price
Current stock price is the price at which stock of the company is currently trading. It is
also known as market value of stock.
Calculation of Current stock price
Current stock price is price at which current supply and demand curve for that stock are
in equilibrium. It can generally be obtained from market data available on various online
databases like Yahoo Finance or Factiva. Current price of 60 denotes that currently stock of
company is trading at $ 50.
Dividend Yield
Dividend yield is defined as return on investment share holder is getting through the
payment of cash dividend.
Calculation of Dividend Yield
Dividend yield is calculated by dividing dividend paid per share with current stock price.
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Subject
Finance