Macroeconomics and Industry Analysis
“Macroeconomics and Industry Analysis” Please respond to the following: • From the e-Activity, examine each industry’s price-earnings ratio and dividend yield. Determine whether the differences make sense in light of their different stages in the industry life cycle. Support your position. eActivity • Go to Yahoo! Finance’s Website and review the price/book ratios for Medical Instruments and Supplies (http://biz.yahoo.com/ic/520.html) and for Electric Utilities (http://biz.yahoo.com/ic/911.html). Be prepared to discuss. • Choose an industry in which you are interested, and predict its performance within the business cycle. Provide support for your prediction. “Equity Valuation” Please respond to the following: • Justify the circumstances that are best suited for the dividend growth model approach versus the price-to-sales ratio model to value a firm. Provide an example of each. • Create an argument for using the free cash flow valuation approach for equity valuation. Provide support for your argument.