--%>
Assignment Help - homework help

What is the current example of a value company

What is the current example of a value company and would you buy it as an investment. Why or why not?

E

Expert

Verified

An illustration of a value company would be Altria/Phillip Morris. Its its dividend is high, it is in saturation phase and not expected to grow much in future. Management there does not add a whole lot of value, and earnings do not have a lot of expected progress.

I would invest in its stock because historically the value stock have been seen to outperform the growth stocks. The claim that value stocks produce higher returns than growth stocks over time has been borne out by many studies. These studies objectively identify value stocks in slightly different ways, all of which are valid. Some studies advocate stocks with low P/E (price to earnings) ratios. The Other studies advocate buying stocks with high ratios of book value to the market value. Still others advocate purchasing stocks with high dividend rates. These are all different methods of identifying value stocks. All produce similar results when applied consistently over long periods of time.

   Related Questions in Corporate Finance

  • Q : Explain useful properties of

    Explain useful properties of low-discrepancy sequence theory or quasi random number theory.

    		•
  • Q : Why classical option pricing required

    Why classical option pricing with constant volatility required?

    		•
  • Q : Difference between capitalization and

    Is the difference for the value creation in a company among the market value of the shares (capitalization) and their book value a good measure since its foundation?

    		•
  • Q : Explain Cost of capital aspect Cost of

    Cost of capital aspect: Estimation of WCR is beneficial from the point of view of cost of capital too. A sound working capital position is beneficial from the point of view of both owners and lenders of the company. A sufficiently positive position me

    		•
  • Q : Affect the value of the stock Is the

     Is the value of this stock dependent on how long you plan to hold it? In other words, if your planned holding period were 2 years or 5 years rather than 3 years, would this affect the value of the stock today, P0? Explain your answer.<

    		•
  • Q : Which parameter good measures value

    Which parameter good measures value creation; the Economic Value Added (EVA), the CVA (Cash Value Added) or the economic profit?

    		•
  • Q : WCR lower cost of storage Inventory is

    Inventory is an important part of WCR estimation. It is a current asset, which depletes over period of time. Also, it requires creation of facility, which would help in storing the inventory and estimate the associated cost of maintaining and transporting it. The esti

    		•
  • Q : Investors are irrational or naive

    Explain how companies with substandard financial history can draw the attention of investors. Are investors irrational or naive?

    		•
  • Q : Determine the future value What would

    What would the future value after 5 years of $100 be at 10% compound interest?

    		•
  • Q : Marketing Decisions & Profitability

    Marketing Decisions Assignment:  Email the answers to the following questions in an attached word document using the proper file name format as follows:  1   

    		•