Name:

Wall Street Journal: Assignment #2

This is an INDIVIDUAL assignment. Submit your answers in hardcopy at the beginning of class. Check the syllabus for the due date. Handwritten answers are NOT acceptable. Use Word to write your answers.

Chapter 4: Investing

Please choose a publicly traded company that you find interesting or would like to invest in, and find their ticker symbol on http://www.msn.com/en-us/money or www.finance.yahoo.com.

Two factors have been shown significant in determining the long-run performance of stocks: * The size of the company, known as “market capitalization” (often shortened to “market cap”) * The price of the stock, relative to its book value (price to book)

1. Go to http://www.morningstar.com/ and enter the ticker for your chosen stock in the “Quote” box at the top. Record the following information:

Company Name | | Ticker | | Stock price | | Market cap | | Forward P/E | | P/B (price to book) | |

2. Scroll down to the section labeled Company Profile and record the following information: Sector | | Industry | | Stock Type | | Stock Style | |

3. In your own words (i.e. do NOT cut and paste), describe what the company does.

4. Refer to p. 86-87 of the Wall Street Journal Complete Personal Finance Guidebook. a. How are growth stocks defined?

b. What values are their P/E ratios expected to have?

c. How are value stocks defined?

d. What values are their P/E ratios expected to have?

5. Right now, the average stock has a Forward P/E of about 15. Based on the Forward P/E ratio of your stock and your answers to #4 above, is your stock a growth stock or a value stock?

6. The “Stock Style” is determined by the market cap and the valuation ratios (Forward P/E and P/B). The first word (large, mid, small)