Share Price Changes, Stock Risk Profile, and Alternative Investments

  Module 2 Present Value University ECO202: Macroeconomics   Q: 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:      Market value of 100 shares of Well Fargo in one year As at July 13^th 2017 the share price of Wells Fargo was at $ 55.60 and the value of 100 shares was $5, 560. I expect the stock will be higher at $ 65 and this is based on the assumption that deregulation will have a positive impact on bank stocks. At the moment, consumer and business sentiments about the company’s practices may affect operations. This is especially past practices that pushed employees to open fictitious bank accounts. If there are other missteps in the bank’s operations this will cause further reputational damage.   100 shares in one year’s time would be valued at $ 6,500, and having access to more information would provide insight into the company’s operations and future outlook. Share price changes According to Yahoo Finance (2017), the diluted EPS for Wells Fargo (ttm) was 4 and the recent quarterly revenue growth is 1.4%. Business outlook is positive, and the dividend per share has grown in the past five years, but the earning per share fell marginally in the 2016 fiscal year compared to the previous year. When valuing the company’s stock it is necessary to look at the future earnings as higher earnings are associated with higher valuation, as is the case of the bank.  Since the company operates in the banking industry changes in net loans, total assets and customer deposits affect the revenue reported. If the economy continues to improve it is expected that there will be higher deposits, and this will allow the company to invest more. Stock risk profile Generally, the stock price has been on an upward trend i...