Using CAPM and CGM to Calculate Stock Price for XYZ

Number of Pages 4

The writer demonstrates the way finance performance data may be used to calculate the share price for XYZ (a fictitious company). The writer uses the information supplied in a case study and uses the capital asset pricing model (CAPM) and the constant growth model (CGM) as well as the P/E ratio to calculate theoretical share prices and compares them to the real share price. The reason for the differences is discussed. All relevant calculation are shown clearly. Three sources are cited in the bibliography of this four page paper.


File: TS14_TExyzcapmcgm.doc


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