Fundamental Analysis Requirements: The Fundamental
Analysis consists of selecting one company of the 30 companies that make up the
Dow Jones Industrial Average (DJIA). Using several different models, you will
analyze different ways to value the company. The project will conclude with the
investment recommendation and determination of the proper price range to invest
in the company. The Fundamental Analysis will consist of a 2–4-page paper
following APA format (double spaced). The project should include a title page,
company history, model descriptions, valuations, investment recommendation, and
reference page (minimum 2 references).
Company History: Provide a brief history of the company chosen from the 30
companies of the DJIA (minimum 2-3 paragraphs).
Dividend Discount Model (DDM): Describe the
Dividend Discount Model (DDM). Using the DDM value the company (minimum 2-3
paragraphs).
Residual Income Model (RIM): Provide a brief
description of the Residual Income Model. Using the RIM value, the company
(minimum 2-3 paragraphs).
Free Cash Flow Model (FCF): Describe the Free
Cash Flow Model (FCF). Using the FCF value the company (minimum 2-3
paragraphs).
Price Ratio Analysis: Describe the P/E ratio for the company
and determine the expected price of the company using Earnings, Cash Flow and
Sales (refer to Tables 6.1 (p193) & 6.2 (p194)) (minimum 1-2 paragraphs).
Recommendation: Provide a summary of the detailed fundamental analysis for
the company, provide a current status of the company and then explain if you
would invest in the company at the current price. Explain why you made the
investment decision and at what price range you would invest money in this
company (minimum 1-2 paragraphs).
