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FIN 6060 Module 2 Worksheet

This document provides instructions for a worksheet to value stocks and bonds for several major companies: Tesla, General Motors, Apple, Google, and Amazon. Students are to examine annual reports, provide details on outstanding bonds for each company, determine if the bonds are trading at a premium or discount, and explain factors influencing bond prices. They are also to calculate the price of General Motors stock using a dividend discount model and compare it to the current market price.

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345 views

FIN 6060 Module 2 Worksheet

This document provides instructions for a worksheet to value stocks and bonds for several major companies: Tesla, General Motors, Apple, Google, and Amazon. Students are to examine annual reports, provide details on outstanding bonds for each company, determine if the bonds are trading at a premium or discount, and explain factors influencing bond prices. They are also to calculate the price of General Motors stock using a dividend discount model and compare it to the current market price.

Uploaded by

emoshokemehgrace
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FIN 6060: Financial Decision Making

Module 2 - Stock and Bond Valuation Worksheet

Complete this worksheet using the directions within to guide you. Submit your completed worksheet in the “Assignment and Grades” tab in your course
menu. When you have submitted this assignment for grading, please return to Module 2 for a module wrap-up.

Stock and Bond Valuation


Directions Tesla General Motors Apple Google Amazon

Step 1. Examine the http:// http:// http:// http:// http://


annual reports for the www.annualreports.com/ www.annualreports.com/ www.annualreports.com/ www.annualreports.com/ www.annualreports.com/
provided companies. Company/tesla-motors Company/general-motors Company/apple-inc Company/google-inc Company/amazoncom-
inc

Step 2. Provide Principal Amount of Principal Amount of Principal Amount of Principal Amount of Principal Amount of
information the Bond Bond Bond Bond Bond
outstanding bonds Answer: Answer: Answer: Answer: Answer:
outstanding at each
company. Maturity Date Maturity Date Maturity Date Maturity Date Maturity Date
Answer: Answer: Answer: Answer: Answer:

Coupon rate of interest Coupon rate of interest Coupon rate of interest Coupon rate of interest Coupon rate of interest
Answer: Answer: Answer: Answer: Answer:

Time period for each Time period for each Time period for each Time period for each Time period for each
interest payment interest payment interest payment interest payment interest payment
Answer: Answer: Answer: Answer: Answer:

Price of the bond: Price of the bond: Price of the bond: Price of the bond: Price of the bond:
(Calculate using the most (Calculate using the most (Calculate using the most (Calculate using the most (Calculate using the most
current prime interest current prime interest current prime interest current prime interest current prime interest
rate.) rate.) rate.) rate.) rate.)
Answer: Answer: Answer: Answer: Answer:

Step 3. Indicate if the Premium or Discount? Premium or Discount? Premium or Discount? Premium or Discount? Premium or Discount?
bonds are selling at a
premium or discount. Answer: Answer: Answer: Answer: Answer:
FIN 6060: Financial Decision Making
Module 2 - Stock and Bond Valuation Worksheet

Step 4. Indicate factors Additional Factors Additional Factors Additional Factors Additional Factors Additional Factors
(other than the interest 1. 1. 1. 1. 1.
rates and the time 2. 2. 2. 2. 2.
periods) to explain the 3. 3. 3. 3. 3.
differences in the prices
of the bonds.

Step 5. Examine the most Assume the required rate of return is 2% and the growth rate is 1%. Calculate the price of the stock using the dividend discount model.
recent dividend paid by Answer:
General Motors and
respond to the provided Use the Internet to search for the current price of GM stock. Is it the same as your calculation?
prompts. Yes or No?:

If your calculation is not the same, explain why there is a difference.


Explanation:

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