FIN 550 Week 7 Assignment 2 Building Your Portfolio Updated
FIN 550 Week 7 Assignment 2 Building Your Portfolio NEW
This assignment is based on the portfolio you have created using the StockTrak Portfolio Simulation software, found at http://stocktrak.com/ . Make sure to show your work for any calculations, as well as include any charts or graphs that illustrate key concepts.
Write a five to seven (5-7) page paper in which you:
1.Determine the growth rate of the company whose stock comprises the largest percentage of your portfolio. Describe how its growth rate compares to that of the market. Find the market multiple, and determine P/E ratios for the company, using the beta coefficient. Assume that the company can maintain its superior growth rate for the next five (5) and ten (10) years.
2.Select any two (2) stocks in your portfolio and compute the growth duration of each company stock relative to the S&P Industrials, and the growth duration of Company A relative to Company B. Then, given these growth durations, determine your investment decision.
3.Using the Constant Growth Dividend Discount Model, and assuming that all companies pay dividends, compute the expected long-term total return on the stock that comprises the largest percentage of your portfolio.
4.Using the most recent financial statements for the company whose stock comprises the largest percentage of your portfolio:
a.Identify and calculate the three (3) components of the DuPont formula.
b.Calculate the Return on Equity (ROE), using the three (3) components of the DuPont formula.
c.Compare your calculated sustainable-growth rate with its actual growth rate. Recommend two (2) courses of action that the company should take if the calculated sustainable-growth rate exceeds the actual growth rate, and if the calculated sustainable-growth rate is less than the actual growth rate.
Your assignment must follow these formatting requirements:
•Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA format. Check with your professor for any additional instructions.
•Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
•Analyze the individual investments in a corporate portfolio in relation to the market to support a firm’s investment planning decisions.
•Conduct industry analysis to support investment decisions by identifying changing market conditions and industry trends that will affect investment performance.
•Conduct company analysis and stock valuation to determine investment potential of a company’s stock.
•Use technology and information resources to research issues in corporate investment analysis.
•Write clearly and concisely about corporate investment analysis using proper writing mechanics.