Purchase Solution

Valuation Models: ConocoPhilips

Not what you're looking for?

Ask Custom Question

Company: ConocoPhillips

Initiative to shareholders: "Through our investments, we are continuing to increase our emphasis on exploration and production, to which 86 percent of our capital program was dedicated during 2010, with 89 percent planned for 2011."

Annual Report - 2010

Justify the current market price of ConocoPhillips using the 3 valuation models: CAPM, PEG, and DDM.

Show calculations to support findings, including rates of return.

Which model best support the findings?

Purchase this Solution

Solution Summary

This solution shows how to use the capital asset pricing model (CAPM), price/earnings to growth (PEG), and dividend discount model (DDM) valuation models to justify the 2010 market price of ConocoPhillips.

Solution Preview

Hi,

** Please see the attached file for the complete solution response **

Valuation of ConocoPhillips Share Price
Current market price of ConocoPhillips=$66.90
Beta=1.23
Return on equity=16.97%
Earnings per share=$7.68
Payout ratio=30%
Risk free rate (return on 3-month T-bill)=0%
S&P 500 (Market rate of return) ...

Solution provided by:
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
Recent Feedback
  • "thank you!"
  • "Thank you again Jayant. You are super fast. "
  • "Thank you Jayant. You are appreciated. "
  • "Again, thank you Jayant. You are wonderful. "
  • "Thanks Jayant."
Purchase this Solution


Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.