Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
4th Edition
ISBN: 9780134475561
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 10, Problem 1DC

DATA CASE As a new junior analyst for a large brokerage firm, you are excited to demonstrate the skills you learned in college and prove that you are worth your attractive salary. Your first assignment is to analyze Johnson & Johnson stock. Your boss recommends determining prices based on both the discounted free cash flow valuation method and the comparable ratio method. You are a little concerned about your boss's recommendation because your finance professor explained that these two valuation methods can result in widely differing estimates when applied to real data. You are really hoping the two methods will reach similar prices. Good luck with that!

l. GO to Reuters (http://www.reuters.com) and enter the for Johnson & Johnson (JNJ) in the "Search" box, then select Johnson and Johnson. From the main page for JNJ, gather the following information, and enter it into a spreadsheet:

a. The current stock price (on the left side of the page)
b. The EPS (TTM)
c. The number of shares of stock outstanding
d. The industry P/E (TTM) ratio

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Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)

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