Research Paper
FIN301 Principles of Finance
SESSION LONG PROJECT
MODULE 2
Present Value
TUI University
June 10, 2013
Carnival Corporation is my company of choice for this course. As pointed out previously, the share price rose $1.80 from 2012 to 2013. Using this data and data gathered from Yahoo Finance, I will determine the futures price of 100 shares in 2014. Futures price is defined as the price at which the two participants in a futures contract agree to transact on the settlement date (Futures Price, n.d.). If I were to go into agreement to buy shares of Carnival Corporation, ticker symbol CCL on the New York Stock Exchange, I would consider a few things before making this decision. And I would assume some risk and decide if it is worthy for me to do so based on where I think the stock will be in one year. Given Carnival’s recent mishaps, the rise in stock price from 2012 to 2013 does prove it is still a viable option among travellers and a can possibly provide a profit. The rise in stock price was 6% and using this as a basis, I would say that the price would again go up around this amount, anywhere between 4-7% based on current prices. Though it has not provided substantial returns and it’s rate of return has consistently gone down, Carnival Corp. can provide a small gain for me as a new investor. I anticipate the price being a bit higher, somewhere between the 4-7% range again. Using today’s, June 10th, close price of $32.54, which is up 4% from last year’s stock price, but down almost 2% from last month’s price, I would enter into an agreement for a 12-month futures contract. I would use 5% as the average to determine the futures price for 2014. I got that from adding the 4% based on the change from last month’s price and 6% based on the change from last year’s price.
SESSION LONG PROJECT
MODULE 2
Present Value
TUI University
June 10, 2013
Carnival Corporation is my company of choice for this course. As pointed out previously, the share price rose $1.80 from 2012 to 2013. Using this data and data gathered from Yahoo Finance, I will determine the futures price of 100 shares in 2014. Futures price is defined as the price at which the two participants in a futures contract agree to transact on the settlement date (Futures Price, n.d.). If I were to go into agreement to buy shares of Carnival Corporation, ticker symbol CCL on the New York Stock Exchange, I would consider a few things before making this decision. And I would assume some risk and decide if it is worthy for me to do so based on where I think the stock will be in one year. Given Carnival’s recent mishaps, the rise in stock price from 2012 to 2013 does prove it is still a viable option among travellers and a can possibly provide a profit. The rise in stock price was 6% and using this as a basis, I would say that the price would again go up around this amount, anywhere between 4-7% based on current prices. Though it has not provided substantial returns and it’s rate of return has consistently gone down, Carnival Corp. can provide a small gain for me as a new investor. I anticipate the price being a bit higher, somewhere between the 4-7% range again. Using today’s, June 10th, close price of $32.54, which is up 4% from last year’s stock price, but down almost 2% from last month’s price, I would enter into an agreement for a 12-month futures contract. I would use 5% as the average to determine the futures price for 2014. I got that from adding the 4% based on the change from last month’s price and 6% based on the change from last year’s price.