David J. Kostin (212) 902-6781 david.kostin@gs.com Goldman‚ Sachs & Co. Stuart Kaiser‚ CFA Corporate fundamentals support continued profit cycle expansion We forecast S&P 500 revenues rise by more than 4% in 2013 and 2014‚ margins hover at current levels (8.8%-9.0%)‚ earnings climb by more than 6% and the P/E multiple expands modestly from 13.2x to 13.8x at end 2013. (212) 357-6308 stuart.kaiser@gs.com Goldman‚ Sachs & Co. Amanda Sneider‚ CFA (212) 357-9860 amanda.sneider@gs.com
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dividend yield on the S&P 500 Index has long been examined as a measure of stock market value. For instance‚ the wellknown Gordon growth model expresses a stock price (or a stock market’s price) as the discounted value of a perpetually growing dividend stream: D P = ------------- . R–G (1) price dividends in Year 0 expected return annual growth rate of dividends in perpetuity Now‚ solving this equation for the expected return on stocks produces D R = --- + G. P (2) where P = D= R = G= Thus
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Assignment II: Business Basics Biogen Idec Biogen Idec is a global biotechnology company focused on discovering‚ developing‚ manufacturing and marketing therapies for the treatment of multiple sclerosis and other autoimmune disorders‚ neurodegenerative diseases and haemophilia. Biogen Idec was formed in 2003 from the merger of two companies‚ Biogen Inc.‚ founded in 1978‚ and IDEC Pharmaceuticals Corporation‚ founded in 1985. It is one of the largest biotechnology companies in the world. Biogen
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Assessment of Wal-Mart valuation using different methods To test the assumption of a discount rate of 7% as given in the outline of the case‚ we calculated the required rate of return for the Wal-Mart stock using CAPM . Using rWalMart = Rf + βWalMart [E(RM) – RF]‚ we find the required rate of return to be 7.01% and in line with the information given in the case outline. Perpetual dividend growth model: The standard method of calculating a stock price using the perpetual dividend growth model
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to the +2.5% points for the median company in the sector) and TRS (total returns to shareholders – which was higher than the sector and the S&P 500) were very impressive‚ the less ‘crucial’ earnings multiple fell from 16 to 10. Part of it was because their multiples had been high at the outset‚ and also the low earnings at the start‚ and those ratios soon gravitated towards the median for the sector after a few years. This also shows that the multiples comparison is not as important and critically
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reengineering Financial performance Financial statements Financial ratios EPS and PE ratios Total returns to investors Economic Value Added Financial statements Strengths ◦ Reveals trends ◦ Comparison of absolute sizes Weaknesses ◦ ◦ ◦ ◦ ◦ No assessment of efficiency Biased by size differences Book‚ not market values Influenced by GAAP choices Backward looking Financial Ratios Strengths ◦ Adjusts for size differences (relative measure) ◦
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R e s e a r c h July 30‚ 2002 Asset Valuation & Allocation Models Dr. Edward Yardeni (212) 778-2646 ed_yardeni@prusec.com Amalia F. Quintana (212) 778-3201 mali_quintana@prusec.com - Introduction I. Fed’s Stock Valuation Model How can we judge whether stock prices are too high‚ too low‚ or just right? The purpose of this weekly report is to track a stock valuation model that attempts to answer this question. While the model is very simple‚ it has been quite accurate and can also be used
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the calculations‚ several assumptions and limitations on BreadTalk’s intrinsic value of share price were analysed and consequently estimated with four models. These models are Dividend Valuation Model‚ Free Cash Flow to Equity Model‚ Price/Earnings Ratio Model and the Price/Book Value Model. Through the use of the mentioned models‚ we will conduct an in-depth analysis and evaluate on the results obtained to provide an assessment of the company’s current position and the future prospects. Contents
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Cited: Anderson‚ K. P.‚ & Brooks‚ C. (2005‚ May 01). Social Science Research Network. Retrieved 08 01‚ 2011‚ from Social Science Research Network: http://ssrn.com/abstract=739664 Apple Inc (NMS: AAPL) Apple Inc. (2011). Apple Inc. Annual Report Cupertino: Apple Inc. Epstein
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Contents Introduction …………………………………………………………… P.3 Liquidity Ratios ……………………………………………………….. P.3-6 Financial Leverage Ratios ……………………………………………... P.6-7 Profitability Ratios ……………………………………………………... P.8-9 Market-based Ratios ……………………………………………………. P.10-11 Dividend Policy Ratios …………………………………………………. P.12-13 Conclusion ……………………………………………………………… P.13-14 Reference ……………………………………………………………….. P.15-16 Introduction Cathay Pacific Airways
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