Expert Answers

1. What is meant by ” intrinsic values:? How is it determined ?
2. The Hall Dental Supply company sells at $32 per share, and Randy Hall, the CEO of this well-known Research Triangle firm, estimates the latest 12-month earnings are $4 per share with a dividend payout of 50%. Halls’s earnings estimates are very accurate.
A. What is Hall’s current P/E ratio-
b. if an investor expects earnings to grow by 10% a year, what is the projected price for next year if the P/E ratio remains unchanged?-
c. Ray Parker, President of Hall Dental Supply Company, analyzes the data and estimates the payout ratio will remain the same.
Assume the expected growth rate of dividend is 10% , would this stock be a good buy? why or why not?
d. if interest rate are expected to decline, what is the likely effect on Hall’s P/E ratio?
3. What impact does the market have on well-diversified portfolios What does this suggest about the performance of mutual funds?
4. What is the relationship between fundamental analysis and intrinsic value?