Stock Valuation and Financial Analysis of a Moderately Growing Company

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Analysis of Stock PriceThe company analyzedhas expected cash flow of $ 320 million in 2009 and it is expectedto reach $ 350 million in 2010. Company under evaluation is moderate growth stock its growthrate of its cash flows is calculated asYearCash FlowCash flow growth rateFinal year cash flow-initialyear cash flow/ initial yearcash flow2009$325.002010$350.007.69%2011$400.0014.29%2012$425.006.25%2013$450.005.88%All figure in $millionsAs thispublicallytradedaddresses efficient market hypothesis it means all the internaland external information about the company is in public domain.Analyzing summary of information of company’s stock52-week range: High 75 Low3552 week range denotes the range of the company’s share price in last one year52 week high is the maximum price at which stock of the company has traded inpast oneyear so 52 week high of 75 means maximum share price of this company in last one year is 75.

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52 week low means that minimum price at which stock of the company has traded in pastone year so 52 week low of 35 means minimum share price of this company in last one year is35.Calculation of 52 week range52week range is calculated by analyzing company’s stock price history of past one yearandthen identifying the maximum and minimum stock price during the period of evaluation.Current stock priceCurrent stock price is theprice at which stock of thecompany is currently trading. It isalso known as market value of stock.Calculationof Current stock priceCurrent stock priceis price at which current supply and demand curve for that stock arein equilibrium. It can generally be obtained from market data available on various onlinedatabases like Yahoo Finance or Factiva. Current price of 60 denotes that currently stock ofcompany is trading at $ 50.Dividend YieldDividend yield is defined as return on investment share holder is getting through thepayment of cash dividend.Calculation of Dividend YieldDividend yield is calculated by dividing dividend paid per share with current stock price.

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