Research Paper

1998 WordsMay 14, 20138 Pages
ABSTRACT This paper will provide investors with the necessary information to determine whether or not Bank of America stock should be in a position of sell, hold or buy. In this paper you will find important information about the company’s market position, financial data and their future growth potential. I will use Graham’s CAPM formula to estimate the intrinsic value of the stock. It was difficult to calculate the intrinsic valve of the stock by utilizing the CAPM formula with the dividend discount model. However, I was able to successfully calculate the intrinsic valued by using the Ben Graham’s formula. My findings indicate that Bank of America shares are worth $21.33 and it is recommended that investors hold their positions. The Background of the Company with a Life Cycle Analysis Bank of America Corporation, banking and financial services corporation formed through Nations Bank’s acquisition of Bank America in 1998. One of the largest banking organizations in the United States, Bank of America is headquartered in Charlotte, North Carolina (britannica.com). It operates as the third-largest bank in the U.S with over 4,200 retail consumer banking locations in 21 states and the District of Columbia (answers.com). The company is ranked number one in terms of deposit market share in Texas, California, Florida, Georgia, North Carolina, and Washington. Bank of America has four main business segments, comprising Consumer Banking, Commercial Banking, Global Corporate and Investment Banking, and Asset Management. Through these segments, the firm provides financial products, services, and solutions to customers in 48 states and 38 countries across the globe (bankofamerica.com) The bank’s history dates to 1904 when Amadeo Peter Giannini opened the Bank of Italy in San Francisco. It eventually developed into the Bank of America and was for a time owned by

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