So, they would like a detailed explanation of how the market
price is determined—what do investors look for, and what can management do to provide
what investors want? Bob Wilkes also wants you to explain how stock valuation information
can be used to help estimate the company’s cost of equity. Tony Biddle provided some information that can be used in the stock valuation process. First, as background on what investors think about the company, here are some representative quotations taken from analysts’ reports issued during the past few years: