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Obtain stock performance data from CRSP Monthly Stock Data for the period from December to the most recent available date. Collect data series including company name, dividend cash amount, stock price or bid/ask average, shares outstanding, and cumulative adjustment factors for prices and shares in cases of stock splits. Use SEC company reports to retrieve net income, total assets, and equity for two recent years with corresponding stock data. Obtain monthly S&P 500 price and total return indices over the same period from an external Excel file.

Prepare a series of analytical graphics and tables:

• A normalized comparison graph of your company’s stock performance and the S&P 500 over the entire period.
• A graph showing the annual dividend yield or the annual rate of price increase if no dividends were paid.
• Tables summarizing beginning and ending prices, annualized returns, ratios such as Tobin’s Q, return on assets (ROA), return on equity (ROE), and leverage ratio for two years and specific sub-periods.
• A table displaying the worst and best calendar-year returns for your stock and the S&P 500 from 2007-2014, including the total return calculation assuming dividends are paid at year-end.

Graphs should be neatly formatted with legends and axes titles. All return values should be expressed as percentages without excess decimals. Dollar values should be presented in appropriate units such as millions or billions for clarity. Number all graphs and tables clearly and provide proper titles for reference.

For the second report, provide an objective analysis for potential investors. Introduce your company, summarize its stock performance relative to the S&P 500 during the period, and discuss any notable features such as dividend payment patterns, Tobin’s Q ratio, and stock movements during significant events. Reference graphs and tables explicitly to support your analysis.

Conclude with your assessment of the company’s future trajectory and potential stock return in upcoming years, supported by data insights. Keep the report within two double-spaced pages, using a standard 12-point font, with citations in a clear and consistent format. The report should not include raw data but should feature well-organized graphs and tables that explicitly relate to your analysis.

Paper For Above instruction

The task involves an extensive analysis of a publicly traded company's stock performance over a defined period, integrating data from multiple sources such as WRDS, SEC filings, and market indices. The objective is to synthesize quantitative data into meaningful visuals and tables that inform a comprehensive industry and financial analysis suitable for potential investors.

Data collection forms the foundation of this project. First, the researcher must extract monthly stock data from CRSP, covering the period from December to the latest available date. This data includes essential variables such as dividend payments, stock prices, shares outstanding, and information concerning stock splits, which necessitate adjustments for price and share counts to ensure accuracy. The researcher must also identify the company's corresponding 10-K filings from the SEC, focusing on the most recent two years that align with stock data availability. From these filings, key financial metrics—net income, total assets, and equity—are retrieved to serve as basis points for financial ratios and valuation models.

Adding market context, the analyst incorporates the S&P 500 index's total return and price data, enabling relative performance assessments. This comprehensive data set facilitates the creation of normalization graphs comparing stock and index trajectories, as well as dividend yield calculations and other financial ratios, such as market capitalization, Tobin’s Q, return on assets, and return on equity.

One critical visualization involves plotting the company's normalized stock performance alongside the S&P 500 index, providing a clear comparison over the entire period and significant sub-periods like the recession and recovery phases. The normalization ensures both series start at 1, making growth and decline patterns easily observable. The dividend yield graph summarizes the annual dividends relative to year-end stock prices, revealing dividend policies' stability or discontinuities. If dividends are absent, an alternative graph illustrating annual stock price growth is prepared.

To deepen financial analysis, the researcher constructs tables calculating key valuation metrics such as Tobin’s Q—market value of assets divided by book value—along with profitability ratios like ROA and ROE, and leverage ratios indicating financial structure. These metrics are provided for two recent years, based on SEC data, offering insights into relative valuation and financial health.

Further, the report includes an analysis of yearly stock returns, identifying best and worst performing years in the sample period. The performance is calculated by considering both stock price changes and dividends, assuming end-of-year dividend payments, and expressing these as percentages. These metrics help in understanding historical volatility and return patterns.

The second report synthesizes the data into an accessible narrative aimed at potential investors. It begins with an overview of the company's history and performance, then evaluates its stock behavior over the period, especially during recession and recovery. Using the visual evidence from graphs and tables, the report discusses key features such as dividend persistence or cessation, Tobin’s Q ratios, and stock volatility in response to particular events. The analysis also explores possible reasons behind significant stock price movements and assesses future prospects, incorporating relevant external information where applicable.

Overall, the project emphasizes clarity, accuracy, and thoroughness, combining quantitative rigor with strategic interpretation. These insights aim to provide an unbiased, data-driven perspective that aids investment decision-making, complying with standard academic and professional reporting formats, including citations and labeling.

References

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