Finance Securities Analysis

FNBSLW 456 Security Analysis

Semester Project
To analyze a publicly-held corporation in order to evaluate its common stock and one of its outstanding bond issues, and to make an investment recommendation regarding the stock.
Bond Project
  1. Forecast interest rates (both short-term rates and long-term rates) for the next year based on information from current financial publications.   That is, describe the consensus of the experts.   Emphasis should be on the reasons for your forecast.
  2. List the important characteristics, including issue date, interest dates, maturity date, rating, amount outstanding, coupon date, current price, call feature, sinking fund, and any other important features. (The maturity of your bond, from today, should be five years or more) If your company does not have a bond issue outstanding, use a bond issue by AT&T.
  3. Calculate the following (Be sure to show all calculations.):
      a. Current Yield
      b. Yield-to-Maturity
      c. Realized Compound Yield (assuming a reinvestment rate consistent with your interest rate forecast)
      d. Duration
      e. Accrued interest as of July 1
  4. List the yields on Treasury securities for various maturities up to twenty years or the maturity of your bond (whichever is longer).   Graph the current yield curve for Treasuries.   Plot the YTM of your bond, and calculate the differential between the YTM of your bond and a Treasury of the same maturity.

Due date: March 18

*** The company we picked was Pfizer, like I said we found some of the information and picked a bond that they have issued currently.   So, far we have done some searches on Ameritrade, Morningstar, S&P (through our library), and some other garbage places.   This is all I have so far, shouldn’t be too bad, I am sure you can offer some assistance to me, this is your bread and butter, I really appreciate you taking the time out of your busy day to help me, and my partner as well appreciates it, see...