Docstoc

Assignment Solutions

Document Sample
Assignment Solutions Powered By Docstoc
					      FIN 715–Investment Analysis: Assignment 3 Solutions
Use the third quarter data from Ford Motor Company’s 10-Q for Q3 ending 2003-09-30
  and the firm’s history of recent dividends.

                    kk        15%

1. Constant Dividend Growth                       D  0   1  g    1  g T 
                                         V  0                     1           gk
                                                       kg             1 k  
                                                                                 
                    gg          5%
                  D_0        $0.40       V  0  T  D  0                          g k
                     tt         20
               Price =       $3.93

2. Two-Stage Dividend Growth                      D  0 1  g1    1  g1 T   1  g1 T D  0 1  g
                                         V  0                   1                 
                                                      k  g1         1 k    1 k 
                                                                                                 k  g2
                 gg_1           0%
                    ttt          3
               Price =       $3.67

3. Earnings (P/E) Analysis               Expected Stock Price = Historical P/E Ratio  Projected EP

     Current EPS            ($0.58)
      P/E Ratio              (4.82)
     EPS Growth            -71.26%
              Price =        $0.80

4. Cash Flow (P/CF) Analysis             Expected Stock Price = Historical P/CF Ratio  Projected C


     Current CF              $0.92
     P/CF Ratio             (10.92)
     CF Growth            -303.17%
              Price =       $20.50

5. Sales (P/S) Analysis                  Expected Stock Price = Historical P/S Ratio  Projected SP


    Current Sales          $80.59
    P/Sales Ratio            0.19
                            Expected Stock Price = Historical P/S Ratio  Projected SP




Sales Growth       -9.21%
         Price =   $14.13
2003-09-30





   gk


    g k




  1  g1 T D  0 1  g 2 
        
  1 k 
                 k  g2




P/E Ratio  Projected EPS




P/CF Ratio  Projected CFPS




P/S Ratio  Projected SPS
                                 FORD MOTOR CO 10-Q (2000-2003)
Income Statement          2003/09/30          2002/09/30          2001/09/30
                 Sales $147,552,000,000 $157,352,000,000 $140,976,000,000
 Income before Income
                 Taxes   $1,692,000,000    ($184,000,000)  $2,504,000,000
           Net Income   ($1,056,000,000) ($1,304,000,000) ($2,768,000,000)
     Number of Shares    $1,831,000,000   $1,822,000,000   $1,812,000,000
           Share Price           $10.77            $9.80           $17.35
                  EPS            ($0.58)          ($0.72)          ($1.53)
             P/E Ratio           (18.67)          (13.69)          (11.36)
          EPS Growth            -19.42%          -53.15%         -170.92%
         CF per Share             $0.92           ($0.10)           $1.38
            P/CF Ratio             11.65            97.04            12.56
            CF Growth         -1015.05%         -107.31%          -33.45%
       Sales per Share           $80.59           $86.36           $77.80
         P/Sales Ratio             0.13             0.11             0.22
         Sales Growth            -6.69%           11.00%          -19.93%


              NOTES: 1. Remember that the data from quarterly statements needs to be annualized, i. e.,
                            rows 3, 4 and 5.
                     2. In the later income statements, automotive and financial revenues are combined
                            as 'Total Sales and Renevues', but in the earlier income statements they are
                            listed separately, so you need to add them together, i.e, E3, F3 and G3.
2000-2003)
                 2000/09/30            1999/09/30
               $160,220,000,000    $149,120,000,000

                 $3,424,000,000        $5,824,000,000
                 $3,552,000,000        $4,456,000,000
                 $1,649,000,000        $1,209,000,000
                         $25.50                $28.75
                          $2.15                 $3.69
                          11.84                  7.80
                        -41.56%
                          $2.08                $4.82
                           12.28                 5.97
                        -56.90%
                         $97.16              $123.34
                           0.26                 0.23
                        -21.23%


ments needs to be annualized, i. e.,

 d financial revenues are combined
earlier income statements they are
 together, i.e, E3, F3 and G3.
  Common Dividend Summary for ticker F
         Ford Motor Company
Dividend    Record      Payable      Amount
Number        Date        Date      Per Share
   177      5/2/2001    6/1/2001      $0.30
   178      8/3/2001    9/4/2001      $0.30
   179      11/2/2001   12/3/2001     $0.15
   180      1/30/2002    3/1/2002     $0.10
   181       5/3/2002    6/3/2002     $0.10
   182       8/2/2002    9/3/2002     $0.10
   183      11/1/2002   12/2/2002     $0.10
   184      1/31/2003    3/3/2003     $0.10
   185       5/2/2003    6/2/2003     $0.10
   186       8/1/2003    9/2/2003     $0.10
   187     10/31/2003   12/1/2003     $0.10
   188      1/30/2004   3/21/2004     $0.10
   189      4/30/2004    6/1/2004     $0.10


Source: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=F&script=11909&layout=-6&item_id='96to
09&layout=-6&item_id='96topresent.htm'

				
DOCUMENT INFO
Description: Assignment Solutions document sample