Research Project Part 2. Company name : Colgate – Palmolive
THE COMPANY for part 2 of the project can be the company that you were using for the Research Project Part 1 or ANOTHER COMPANY determined by your professor. THE COMPANY for this part of the project must have
listed on the website
– To find the information for your company you need to type the stock symbol in the
window to get into the company’s page.
– To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.
-To find the information for your company you need to type the stock symbol in the
– Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol†to get into the company’s page.
-1â€â€Background and Industry (one
paragraph).
-2-
ratios (10% of the project grade)
a) Find the
ratios for THE COMPANY assigned for you of the project for the last 3-5 years in the Internet. Present these ratios as the table(s) in your project.
b) Write (about) 1 page of the analysis of the ratio results. In your analysis you should answer the following questions.
-3- Collect and evaluate the data about
performance of the assigned company. (15% of the project grade)
Copy the quotations of
Assume that par value of the bond is $1,000. What were the last prices of the bonds in $$$ (listed in the Price column)?
Show your work in your project.
Write a 1-2 page of the analysis of the bonds. In your analysis you should answer the following questions.
d) If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose? You should
to explain your answer.
-4- Collect and evaluate the data about stock performance of the assigned company for the last one year. (totally 35% of the project grade).
(10% of the project grade)
Present the
ratios as the table(s) in your project.
c. Compare the P/E ratio of your company with the industry average or 5-year average. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock?
(15% of the project grade)
c) Beta is listed in
under Trading Information – Stock Price History, as well as on the company’s front page. What is the beta listed for the company? What does it mean?
d) Calculate the required return on the stockusingthe Capital Asset Pricing Model (CAPM) Security Market Line.
2. There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the dividend Payout Ratio on
under Statistics.
Calculate the company’s sustainable growth rate.
3. Apply the Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock.
Please show your work.
Please note that for some companies it is not possible to use the
4. Compare the result of your calculations with the current stock price. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Why?
, as to whether the assigned company’s recent trend in financial and stock performance is of sufficient financial strength to warrant entering in a long-term investment in bonds and/or stocks of the company. Explain your answer (about 1 page)
-6-
Think about the financial strategy of the company, how to best balance THE COMPANY’S financial leverage to optimize shareholder wealth going forward taking into consideration the company’s current market position, credit rating, dividend policy, etc.
-7- Reflection –
(5% of the project grade).
Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)
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