Even complicated and confusing topics will be easily developed and covered if you request our help writing an essay. Place an order today!

Question Description

After engaging in a dialogue with your colleagues on valuation, you will now be given an opportunity to apply principles that were presented in this phase. Using a Web site that provides current stock and bond pricing and yield information, complete and analyze the tables illustrated below. Your mentor suggests using a Web site similar to .

To fill out the first table, you will need to select 3 bonds with maturities between 10 and 20 years with bond ratings of “A to AAA,” “B to BBB” and “C to CC” (you may want to use bond screener at the Web site linked above). All of these bonds will have these values (future values) of $1,000. You will need to use a coupon rate of the bond times the face value to calculate the annual coupon payment. You should subtract the maturity date from the current year to determine the time to maturity. The Web site should provide you with the yield to maturity and the current quote for the bond. (Be sure to multiply the bond quote by 10 to get the current market value.) You will then need to indicate whether the bond is currently trading at a discount, premium, or par.



Face Value (FV)

Coupon Rate

Annual Payment (PMT)

Time-to Maturity (NPER)

Yield-to-Maturity (RATE)

Market Value (Quote)

Discount, Premium, Par







  • Explain the relationship observed between ratings and yield to maturity.
  • Explain why the coupon rate and the yield to maturity determine why the bonds would trade at a discount, premium, or par.

In this step, you have been asked to visit a credible Web site that provides detailed information on publicly traded stocks and select 1 that has at least a 5-year history of paying dividends and 2 of its closest competitors.

“To fill up the first table, you will need to gather information needed to calculate the required rate of return for each of the 3 stocks (use the Capital Asset Pricing model). You will need to find the risk-free rate online. It is the 5-year Treasury rate. You will need the market return which is just the return on the S&P 500 Index, and it is available online. You should use an average over 5 years (find the historical yearly returns for the S&P 500 Index and average them). You must research your stocks to find the betas. You should be able to find them at finance.yahoo.com.”


5-year Risk-Free Rate of Return

Beta (ß)

5-Year Return of S&P 500 Index

Required Rate of Return (CAPM)

“To complete the next table, you will need the most recent dividends paid over the past year for each stock, next year’s expected dividends, the expected growth rate of the dividends (which you can calculate by taking next year’s dividend subtracting off this year’s dividend and dividing the result by this year’s dividend), and the required rate of return you calculated in the previous table. You will also need to compare your results with the current value of each stock and determine whether the model suggests that they are over- or underpriced.

Company Current Dividend Projected Growth Rate of Dividends Next year’s Dividend Required Rate of Return (CAPM) Estimated Stock Price (Gordon Model) = Next year’s dividend / (required rate of return – projected growth rate of dividends) Current Stock Price Over/under Priced

In the third table, you will be using the price to earnings ratio (P/E) along with the average expected earnings per share provided by the Web site. You will also need to compare your results with the current value of each stock to determine whether or not the model suggests that the stocks are over- or underpriced.


Estimated Earning
(next year)

P/E Ratio

Estimated Stock Price (P/E)

Current Stock Price

Over/Under Priced

After completing the 3 tables, explain your findings and why your calculations coincide with the principles related to bonds that were presented in the Phase. Be sure to address the following:

  • Explain the relationship observed between the required rate of return, growth rate and the dividend paid, and the estimated value of the stock using the Gordon Model.
  • Explain the value and weaknesses of the Gordon model.
  • Explain the how the price-to-earnings model is used to estimate the value of the stocks.

Note: You can find information about the top 500 stocks at .


S&P 500 index chart. (2014). Retrieved from the Yahoo! Finance Web site: https://allaplusessays.com/order;

Be sure to document your paper with in-text citations, credible sources, and a list of references used in proper APA format.

testimonials icon
Benefits to the employer It saves the cost of production. Since employees do not report to the office, the employer can save on ,...
testimonials icon
Need someone to answer these questions for me in complete sentences. 1. Compare and contrast British ideas of king...
testimonials icon
For the state of Connecticut and New York,Does the state adopt pertinent changes to the Internal Revenue Code? If s...
testimonials icon
The use of E-Books has increased in recent years, especially with the advent of mobile E-Readers. A marketing research...
testimonials icon
Annual Income StatementName:University:February 2019Introduction Income Statement-Key financial statement thatrecords the financial position of a com...
testimonials icon
Using the South University Online Library, and the Internet, select two completed needs assessments and compare and contrast the steps and...
testimonials icon
Economic Way of ThinkingSubscribedShould Lebron James mow his own lawn? Most pro athletes are strong and capable of...
testimonials icon
Compose a 2250 words essay on Hyatt Hotel chain and its Internal evaluation. Needs to be plagiarism free!The mission is to provide a change...
testimonials icon
5 page paper...
testimonials icon
1Running head: INNOVATIONInnovationNameInstitutionDateINNOVATION2IntroductionInnovation is a concept that is much more efficient than the latter. It...
testimonials icon
Assignment 2: Market FormsThe following questions address some of the Price and Output decisions faced by firms other than those found in Pu...
testimonials icon
Surname 1NameTutorCourseDateAmerican IdiotThe American Idiot is a rock musical that was composed of the 2004 concept albumcalled American idiot. The...

Other samples, services and questions:

Calculate Price

When you use PaperHelp, you save one valuable — TIME

You can spend it for more important things than paper writing.

Approx. price
Order a paper. Study better. Sleep tight. Calculate Price!
Created with Sketch.
Calculate Price
Approx. price