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P/E Ratio is 75.40 and Beta is 1.62 Amazon is company 1. compare the P/E ratio...

P/E Ratio is 75.40 and Beta is 1.62 Amazon is company

1. compare the P/E ratio of your company with the industry average or with a major competitor. How does your chosen company compare in their price compared to earnings? Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

2. CALCULATE THE CAPM

Using the risk-free rate of 2%, and the 7.5% as market return, calculate the CAPM (Capital Asset Pricing Model) for your company stock. You can find the beta of the stock on the same quote page as you found the P/E ratio above. What does this assigned beta tell you about the stock? What is the required rate of return calculated using the CAPM model? Does this seem to be an attainable return and is the investment worth the risk?

P/E Ratio is 75.40 and Beta is 1.62 Amazon is company

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jeff jeffy answered 5 months ago
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