October 2011
Beginner
576 pages
16h 32m
English
Content preview from Equity Valuation and Portfolio ManagementBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
QUESTIONS
Use the Value Line report for IBM dated October 8, 2010, reproduced on the following page, to answer the questions regarding a traditional and value-based metrics analysis of this computers and peripherals company:
- What are the estimated annualized growth rates in revenue, cash flow, and earnings per share for IBM over the period 2011 to 2014? Are these rates favorable or unfavorable?
- What is the estimated ROE for IBM for 2011? Conduct a five-factor ROE Dupont analysis in answering this question. Is the estimated ROE for IBM attractive or unattractive?
- What is the fundamental stock return for IBM for 2011? Does IBM plot above or below the Securities Market Line? Assume a risk-free rate of 5% and a market risk premium of 5% in answering this question.
- What is estimated NOPAT, $WACC, and EVA of IBM for 2011? Based on the estimated EVA (economic value added), is IBM a potential wealth creator or wealth waster?
- What is the prospective EVA style quadrant of IBM for 2011? Interpret the meaning of this quadrant.
- Based on an integrated analysis of traditional and value-based metrics, do you agree with the Value Line ratings of Timeliness and Safety for IBM? Be sure to assign your own stock ratings and explain whether you think IBM is a potential buy or sell opportunity.
1 Paul M. Healy and Krishna G. Palepu, Business Analysis and Valuation: Using Financial Statements (Mason, ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.