FIN402 - Case Problem 8.1 Chris Looks for a Way to Invest His Wealth
Question # 00520855
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Updated on: 05/02/2017 01:52 AM Due on: 05/02/2017
Case Problem 8.1 Chris Looks for a Way to Invest His Wealth
a. Looking first at the stock:
1. Compute the company’s net profits and EPS for each of the next 3 years.
2. Compute the price of the stock three years from now.
3. Assuming that all expectations hold up and that Chris buys the stock at $70, determine his expected return on this investment.
4. What risks is he facing by buying this stock? Be specific.
5. Should he consider the stock a worthwhile investment candidate? Explain.
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Solution: FIN402 - Case Problem 8.1 Chris Looks for a Way to Invest His Wealth