Here is the synopsis of our sample research paper on Valuing Boeing. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3 page paper demonstrates the use of the capital asset pricing model to value a firm. Using Boeing as an example and figures from February 2010 the firm is valued, with all calculations shown. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEboeingval.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
applied to Boeing. One model that is widely used to help with the valuation of shares is the capital asset pricing model. This looks at the firm as an investment
and initially calculates the required level of return for the firm, which can then be used to assess what the firms price should be.
CAPM has the equation of (R) = r + (ERP x beta ),
This is where E(R) is the rate of return that is expected on any single stock, r is the risk free investment rate, ERP is the additional equity risk
premium. However, there are some potential challenges; some of these inputs may be subjective judgments. Here we will assume that the risk free rate is that of the T-bill
is the 1 month rate that is 0.046% (Anonymous, 2010). The firms beta is 1.28 (Yahoo Finance, 2010), this leaves the need to assess the equity risk premium. This
is variable, we will assume that this is currently 6%. This will then give us the equation 0.046% + (1.28 x 6%) = 7.726%
If this should be the rate of return we can now use this along with the return that is already provide to assess the price that the individual
shares, or the firm, should be. The dividends of the firm are the main return used for this calculation; these amounted to $1.68 per share over the last 12 months
(Yahoo Finance, 2010). If these are equal to the required rate of return each share should be valued at $21.74. With 709
...