Research Paper on:
Magenta Share Price Case Study

Unformatted Sample Text from the Research Paper:
will make money for the investor; by capital growth, dividends or a combination of the two. The view will depend on the way that the investor foresee the company and  the shares performing in the future and the price will depend on supply and demand. There have been many attempt to try and develop a logical model that explains the  patters of share price movements. In this case Magenta have seen a large increase in sales and profits between 21000 and 2005, the earnings per share increasing from 0.217  to 0.382 and the dividend from 0.125 to 0.410. The profit has also increased threefold, from 10.863 million to 31.205 million. However if we look at the rate of increase  in the share price this appears to be disproportionately high considering the increases seen in other area. The price starts at 3.870 and increases to 39, taking the P/E ratio  from 14.1 to 55.5. We can look at a range of theories to explain this increase. The most basic way of valuing shares is by looking at the book value.  The value of the physical assets of company is used to give the book value of a firm. The book value may be defined as the net assets of a  company, that is the assets less the liabilities. However if we look at the book value this is increasing but at a much slower rate, the book value per share  starts at 0.37 and increases to 1.07 so this does not explain the growth. We cannot look at valuing stock without using  the capita asset pricing model. This is a very popular model and used by many investors to asset the price of a share. There is an element that considers the