Finance Mod 2 SLP (Essay Sample)
The paper is to be two pages long. You DO NOT need to use complex mathematical formulas for this assignment. Instead, think about how much do you think the market value of 100 shares of your company will be in one year? In considering the possible answer please reflect also on the following:
Do you expect the price of the shares in one year to be much higher? Or lower? Or only a little bit higher?
How risky the stock is. Is its price prone to wild swings up and down? Or has the price been relatively stable the last few years?
What alternative investments you have access to. What rate does your bank give you on a savings account or certificate of deposit? The greater return you can get on other investments, the less you would be willing to pay for an equity future.source..
Finance mod 2 SLP
Yahoo finance- Novartis AG (NVS) stock price expectation and futures price of 100 shares
At the close of Thursday August 6, 2015 Novartis AG (NVS) stock price was $ 102.33 in the New York Stock Exchange (Yahoo Finance, 2015). I expect the stock price of the company to be higher ne year from now at $ 110 per share, since the company has diverse operations. Hence, the expected futures for 100 shares of NVG are $ 11,000. The company is most likely to take advantage of new patents, acquisitions and other drug development. In order to beat expectations then the company’s expectations need to increase at a faster rate.
Even though, there are concerns about the volatility of other major currencies outside US dollar including the Euro, this is not expected to weigh down the company’s earnings and growth forecasts. Even though, the company’s headquarters is in Switzerland it has various locations for research and development. The diversification efforts will prove vital to maintain the company’s competitiveness, relying on a wide distribution network globally, and low cost of operations in East Asia. Additionally, the debt levels are manageable and there is low risk of cash flow problem, hence the resources set aside for research and development are adequate.
Novartis AG (NVS) stock risk
The company’s stock has generally been on an upward trend in the last few years, and even when there have been concerns about negative growth, investors were confident in the company’s ability to rebound. Investing in the company’s stock is for the long-term since it has reported modest improvements in net revenue in the last few years, but there is no concern on Novartis AG (NVS) financing abilities. There is a solid foundation at Nov...
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