Show All Your Work And Screenshot The Data Retrieved

Show All Your Work And Screenshot The Data Retrieved From The Database

Show all your work and screenshot the data retrieved from the databases. Include a reference list of the data and any sources you access. Include a time and date stamp with the data points you include in your calculations.

Paper For Above instruction

The purpose of this assignment is to demonstrate proficiency in bond and stock valuation techniques by utilizing real-time data from authoritative financial sources, specifically FINRA for bonds and Zacks for stocks. The process involves retrieving current data, performing relevant calculations, and providing detailed work and visual documentation to support your findings. This comprehensive approach enhances understanding of theoretical concepts applied in practical financial analysis, reinforcing skills essential for financial decision-making.

Part 1 focuses on bond valuation, where students research specific bonds issued by Apple Inc. and Starbucks Corp., and then perform calculations related to bond pricing, yield to maturity (YTM), current yield, and credit quality assessment. Part 2 requires stock valuation using multiple models, including the constant growth dividend discount model and risk assessment through beta coefficients derived from market data.

Within Part 1, students start by accessing FINRA’s website, navigating to the 'Bonds' tab, and searching for bond data based on provided bond symbols. The collected data include coupon rates, maturity dates, current prices, and other relevant bond metrics. Students then document this data via screenshot and proceed with calculations, assuming semiannual coupon payments and a face value of $1,000. The detailed computation of YTM involves solving for the discount rate that equates the present value of future cash flows to current bond prices, considering semiannual periods.

Furthermore, students assess the credit quality of the bonds by referring to ratings provided by agencies, and compute the required return (Rs) for Apple and Starbucks bonds using the rule of thumb addition of 4% to the YTM. All calculations are documented step-by-step, including the formulas, input values, and results, with references to the data sources integrated into the analysis.

Part 2 shifts focus to stock valuation, where students utilize data from Zacks estimates—such as current prices, earnings estimates, and beta coefficients—to calculate the required rate of return, Rs, via the Gordon Growth Model (dividend discount model). Data collection includes screenshots of the estimated financial figures, timestamps to validate the currency of the data, and citations of the sources used.

Additionally, students combine the calculated individual stock risks (betas) with their investment allocations to determine the overall portfolio beta. This involves weighted calculations based on the invested amounts across the four stocks—Pfizer, Wal-Mart, GE, and Microsoft—and analysis of risk profiles relative to market risk. Summary explanations are provided on which stocks are less risky than the market average based on their beta coefficients, emphasizing understanding of risk-return trade-offs.

Finally, the assignment emphasizes meticulous documentation, including screenshots and timestamps, to substantiate data authenticity. A comprehensive references list follows standard academic formats, citing all data sources, including specific pages or tables accessed within Zacks and FINRA. This rigorous approach ensures transparency, reproducibility, and validation of financial analysis, fostering skills critical for real-world application in investment decision-making.

References

  • FINRA. (2024). Bond Data Search. Financial Industry Regulatory Authority. Retrieved from https://finra-markets.morningstar.com
  • Zacks Investment Research. (2024). Stock Estimates and Data. Retrieved from https://www.zacks.com
  • Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset. John Wiley & Sons.
  • Brealey, R. A., Myers, S. C., & Allen, F. (2020). Principles of Corporate Finance (13th ed.). McGraw-Hill Education.
  • Ross, S. A., Westerfield, R., & Jaffe, J. (2019). Corporate Finance (12th ed.). McGraw-Hill Education.
  • Lintner, J. (1965). The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets. Review of Economics and Statistics, 47(1), 13-37.
  • Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. Journal of Finance, 19(3), 425-442.
  • Fama, E. F., & French, K. R. (1993). Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33(1), 3-56.
  • Gordon, M. J. (1959). Dividends, earnings and stock prices. Review of Economics and Statistics, 41(2), 99-105.
  • Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91.

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