This is a paper that focuses on the Valuation report for Pearson Plc media on stock returns. The paper also provides the tasks to focus in writing the paper.
Valuation report for Pearson Plc media on stock returns
Assignment Title: Valuation Report
Description of the assignment: Pearson plc – Media
Firstly, you are to prepare an analysis on three given determinants of stock returns. Each student will be assigned a UK plc to value (in other words a company listed in London stock exchange). Secondly, bou are also required to justify a choice of one or more equity valuation models you would use in order to value the stock of the particular company.
Thirdly, reports should not exceed 1,500 words excluding tables/figures and references.
Fourthly, run a regression analysis for your assigned company (Pearson plc – Media) where the dependent variable is your assigned company’s monthly closing price for the last 10 years (120 months) period and the three independent variables are i) FTSE 100 index closing values for the same period, ii) the volume of shares traded of the assigned company during that period and iii) the closing price of a major competitor of the assigned company for the same period.
Marking will be on the following tasks:
· Firstly, run the regression analysis and interpret the results.
· Secondly, identify any possible violations of regression assumptions and/or any possible model misspecifications and provide/discuss ways how these can be corrected. Notice: Do not correct for violations or misspecifications.
· Thirdly, evaluate your choice of equity valuation model(s) you would use to value the stock of your assigned company and the necessary assumptions. Notice: Do not value the stock.
Your report might be as follows:
1. Title Page
2. Table of Contents (Tells the reader where everything is)
3. Introduction (Tells the reader what they will find in the report)
4. Discussion & Analysis
4.1. Regression Analysis
4.2. Equity valuation models
5. Conclusion and also recommendations
7. Appendices (if applicable)