Blackmores’ stock has risen a staggering 1268 per cent over the past ten years (2005-2015). For eight of those years, the stock went practically nowhere, and then rose tenfold in the space of two.
1. Examine the share price history and history of traded volumes over the past five years, identifying the main causes of changes in the share price during this period. Based on its stock price, do you think Blackmores has performed well over the past ten years?
2. Calculate the market capitalisation of Blackmores. Do you think Blackmores’ stock is under- priced or over-priced? Answer this question with reference to capital asset pricing model (CAPM), and justify your answer. How do you estimate the future price of Blackmores’ stock? Is this the best time to buy or sell Blackmores’ shares? Why?
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Posted on May 4, 2016Author TutorCategories Question, Questions