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Intrinsic Value

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Using Microsoft Excel and historical daily data from http://finance.yahoo.com, calculate the beta for Harley-Davidson in comparison to the S&P 500 Index over the past year.

Then utilizing the dividend discount model calculate the intrinsic value for Harley-Davidson.

From that analysis, comprise an investment strategy of buy, hold, or sell on Harley-Davidson.

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Solution Summary

The solution explains the calculation of intrinsic value using the example of Harley Davidson.

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Please see the attached files.

Using Microsoft Excel and historical daily data from http://finance.yahoo.com, calculate the beta for Harley-Davidson in comparison to the S&P 500 Index over the past year.

I have taken the data from Aug 16 2007 to Aug 15 2008 for HOG and S&P 500. This is in the attached file. The daily returns are calculated as (Price today-Price yesterday)/Price yesterday. We use the adjusted close values since these are adjusted for dividends and stock splits.

The beta for Harley Davidson comes to 1.43.

Then utilizing the dividend discount model calculate the intrinsic value for Harley-Davidson.

Using the dividend discount model, the intrinsic ...

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