Bond and Stock Performance Analysis
The main COMPANY for this project is HOME DEPOT and the competitor is LOWES
OBJECTIVE
In this part of the project you are to assume to have been hired to join a team serving as an internal financial analyst to THE COMPANY. Your client plans to invest in bonds and (or) stocks issued by THE COMPANY (SELECTED BY INSTRUCTOR). In part 6 of the assignment you are asked to provide some recommendations to THE COMPANY’S management.
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 bonds listed on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. 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.
Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include
SUGGESTED WEBSITES
www.morningstar.com – To find the information for your company you need to type the stock symbol in the Quotes window to get into the company’s page.
http://finra-markets.morningstar.com/BondCenter/Default.jsp – 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.
https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.
www.marketwatch.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.
www.money.cnn.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.
www.finance.yahoo.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.
www.nyse.com – 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.
www.nasdaq.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.
Company’s websites
YOUR SPECIFIC ASSIGNMENT
-3- Collect and evaluate the data about bond performance of the assigned company. (15% of the project grade).
The information on bonds can be found on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. 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.
Another useful website on bond information is https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.
Copy the quotations of two bonds issued by THE COMPANY (SELECTED BY INSTRUCTOR) that contain the Price. Present these quotations in your project.
-4- Collect and evaluate the data about stock performance of the assigned company for the last one year. (totally 35% of the project grade).
1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. (10% of the project grade)
These ratios are available on www.morningstar.com > Company’s page – under Valuation, Financials, and under Dividends
You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.
-2) Analysis of the historical stock prices trend for the last year. (10% of the project grade)
3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project. (15% of the project grade)
Calculate the company’s sustainable growth rate. Please show your work.
Note that for some companies it is not possible to use the Gordon model. If that is the case,explain why it is not possible to use this model for your company. What other models is it possible to use?