Economic analysis

Ghanas population is estimated to 25million with per capital income of $1,776.113 and GDB of
$51.509 billion.
Although Ghana has registered relatively commendable economic growth for the past decade,
the economy has been faced with major challenges in the form of sharp currency depreciation,
deepening energy crisis, deteriorating macroeconomic imbalance, and rising inflation and
interest rates.
Over the medium term, the economy is projected to recover, bolstered mainly by higher oil and
gas production, combined with increased private sector and public infrastructure investments, as
well as an improved macroeconomic framework and political stability.
Ghanas accelerated economic growth over the past decade has helped the country achieve the
MDG goal of halving poverty, although there is evidence of growing disparities in spatial
development and income inequality across regions, especially in the three northern regions.
Progress in the achievement of other MDGs remains mixed, with the 2015 targets likely to be
missed.
Ghanas economy is expected to slow down for the fourth consecutive year to an estimated 3.9%
growth rate in 2015, owing to a severe energy crisis, unsustainable domestic and external debt
burdens, and deteriorated macroeconomic and financial imbalances. Provisional gross domestic
product (GDP) figures issued by Ghana Statistical Services (GSS) further suggest that the

economy expanded by 4.2% in 2014, less than the growth of 7.3% recorded in 2013. The drivers
of growth continue to be the service sectors, which constitute 50.2% of the economy, followed
by industry and agriculture at 28.4% and 19.9% respectively. In 2016 the economy is expected to
recover, registering a growth of around 6%, bolstered by an increase in oil and gas production,
private sector investment, improved public infrastructure and the countrys political stability.
Nonetheless, the prevailing low international oil prices could slow the pace of economic growth
in

the

future.

High growth rates over recent years have been accompanied by the build-up of macroeconomic
imbalances. In 2014 current account and fiscal deficits widened to 9.2% and 10.4% of GDP
respectively, and the rate of inflation averaged 17.0%. By the end of December 2014, foreign
reserves were at 3.2 months of import cover, thanks to inflows from the Eurobond of USD 1
billion and a cocoa syndicate loan of USD 1.7 billion. The domestic currency, the cedi (GHS)
depreciated by over 30% in nominal terms over the first nine months of the year compared to a
depreciation of 4.1% during the corresponding period in 2013. The continued growth in the
budget deficit resulted in public debt increasing from 55.8% of GDP in December 2013 to 67.1%
of GDP by the end of December 2014 and this is projected to be more than 70% by the close of
the year 2015. To address the increasingly unsustainable fiscal and current account imbalances,
the Ghana government has successfully negotiated a stabilisation programme with the
International Monetary Fund (IMF) began in the 2nd quarter of 2015.

THE INDUSTRY ANALYSIS

INSURANCE
The Ghanaian Insurance industry is categorized into two, the life and non- life insurances

The Ghanaian life insurance market is consolidated with the top five companies accounting for
about 80% share in 2012 (up from 78% in 2011). There were 19 life insurers as at May 2014.

In 2012, the life insurance gross written premium (GWP) stood at GHS355.8 million, witnessing
a growth of 31.7% (y-o-y).
Ghanas top three life insurers performance in 2012 is summarised below:

SIC Life Insurance collected GHS100.3 million representing a premium growth of 39%
(y-o-y). SIC is listed on the Ghana Stock Exchange and owned by government (40%) and
others including institutions and individuals (60%)

Enterprise Life Assurance reported total premium collection of GHS89.1 million,

representing a growth of 45% (y-o-y)

Glico Life Insurance reported a gross premium of GHS36 million witnessing 4.65%
growth (y-o-y)

The Ghanaian non-life insurance market is relatively fragmented with the presence of 26 players
as at May of 2014

The top five companies accounted for 60.6% share of the total market in 2012 (little

movement from 60% in 2011)

In 2012, non-life insurance GWP stood at GHS 494.9 million witnessing a growth of

38% (y-o-y) from 2011

Top three non-life insurers performance in 2012 is summarised below:
SIC Insurances GWP increased by 38% (y-o-y) to GHS 109.97 million
Star Assurance reported premium of GHS60.895 million, witnessing 70% growth (y-o-y)
Enterprise Insurance witnessed 25% (y-o-y) growth in GWP in 2012

Challenges affecting the growth of the industry includes low patronage, limited knowledge, and
lack of confidence in the system, delays in claim payments, fraudulent claims and price
undercutting
The National Insurance Commission (NIC) on April 1, 2014 began to implement the No
premium, no cover policy, which requires insurance firms to collect premiums upfront before
providing insurance cover. It implies that insurance companies will no longer be required to sell
insurance products on credit to customers.

Future Developments
The discovery of oil in Ghana is expected to transform the economy in the years ahead. The
insurance industry is expected to position itself by enhancing its balance sheet size in order to
underwrite huge oil and gas related policies.
Large demand capacities exist in corporate institutions, government agencies, professional and
other bodies, new companies being established, and among high net-worth individuals.
Moreover, a large number of shops do not have any insurance policy. The informal sector
(workers who are mostly self-employed and engaged in trading or other business outside the
formal stream) has been largely ignored by insurance companies who usually target only the
formal sector (government and privately employed workers who are captured on the national tax
database and also on the social security and national insurance scheme. The formal sector is
more attractive due to the stable and predictable flow of income).

With the introduction of agricultural insurance and the implementation of compulsory insurance
of commercial buildings, the industry is expected to grow significantly, going forward.

Agricultural insurance which currently covers the production of maize in northern Ghana is
expected to be extended to cover other crops like rubber and cocoa as well as livestock.

The new draft bill which is pending approval from parliament has a provision for an appropriate
micro insurance regulatory framework. This aims at targeting low income households in the
informal sector by providing them with affordable insurance products that will meet their needs.
All these initiatives are expected to lead to growth in the insurance industry and increase
insurance penetration. With this, the contribution of insurance services to gross domestic product
will also increase
.
Key trends
The concept of Banc assurance was introduced in the country in 2007 by the National Insurance
Commission (NIC). It aims at selling insurance products through other financial institutions,
particularly the banks. As at September 2013, there were about 19 Banc assurance collaborations
between commercial banks and insurance companies

OVERVIEW OF THE FOOD & BEVERAGES SUB-GROUP

The Food and Beverages Sub-sector is currently the largest contributor to the manufacturing
GDP, according to the 2011 GDP figures released by the Ghana
Statistical Service (GSS) accounting for about 30.0% of manufacturing value added in 2011 and
employs several hundreds of people directly and indirectly.

The Food & Beverages sub-group comprises industries processing food and beverages and these
companies are spread across all districts, municipalities and metropolis in the country.
The sub-group plays a critical role in the countrys economy in ensuring food security and
provision of raw materials (in the form of crops, fruits, vegetables, etc.) to the manufacturing
subsector in the country.
The activities of the sub-group ensures that during the bumper harvest crops, vegetables and
other agro-based materials are stored to be used during the lean season through processing. This
way, the Food & Beverages Sub-group:

The Food and Beverages sub-group is made up of several economic activities.

Firm Analysis
Guinness Ghana Breweries Limited (GGBL) is a Ghana-based company that is principally
engaged in brewing. Guinness Ghana Ltd became Guinness Ghana Breweries Ltd after its
merger with Ghana Breweries Ltd. GGBL is one of the fastest growing subsidiaries of Guinness
Overseas. The company was founded in 2004 and is based in Kumasi, Ghana. Guinness Ghana
Breweries, Ltd. is a subsidiary of Diageo plc.
GGBL was incorporated in August 29th, 1960 with current stated capital of GH () 26,252,000
with issued share of 211,338,142(ordinary shares) of no par-value. The authorized share of
GGBL stands at 200 million ordinary.
The companys nature of business among others is production of Guinness Extra Stout, Star
Beer, Gulder, and non-alcoholic liquor "Malta Guinness and Amstel Malta.
Guinness Ghana Breweries Ltd (GGBL), Ghana, has recently launched a new home-grown beer
called Ruut Extra Premium Beer produced from locally grown cassava.

GGBL is one the leading companies in the food and beverages sector and was recently adjudged
the leader in the food and beverage sector on the 2015 AGI awards.
Five Financial years Summary

Directors of the company are: David Harlock - Chairman. Peter Ndegwa - Managing. E. M.
Boye, Mr. Charles Kimeria Mwangi, Mr. Didier Francis Martial Leleu, Mr. James Kweku
Inkoom, Katherine Joanna Seljeflot, H. Essie Humphrey-Ackuney, Mr. Leo Breen, Mr. Simon
Harvey, Mr. Boudewijn Nicolaas Haarsma, Mr. Kofi Sekyere
Enterprise Insurance Co. Ltd was established in 1924 and is the oldest insurance company in
Ghana. Enterprise Insurance was listed on the Ghana Stock Exchange (GSE) in 1991 becoming
the first insurance company to be publicly listed on the Ghana Stock Exchange.

In the year 2000, Enterprise Life was incorporated in a partnership between EIC and African Life
through the instrumentality of the IFC.Enterprise Life has seen impressive growth since 2001
and currently is the second biggest Life Assurance Company.

Enterprise Life has been adjudged CIMG Life Insurance Company of the Year, has been ranked
No. 1 in the Financial Services Sector and the 3rd Most Prestigious Company in Ghana among
other awards. Currently, Enterprise Life has a presence in the Gambia.
For the purposes of sustained growth and the ability to take advantage of profitable business
opportunities in sectors of the economy other than insurance as well as continually returning
increased value to shareholders, clients and employees, new subsidiaries have been established
which include Trustees and Properties.
Incorporated in 2010, Enterprise Trustees is a pension administration company while Enterprise
Properties is a real estate development and investment wing of the Group.

The Enterprise Group was listed on the Ghana Stock Exchange in 2010. The group is managed
by a team of proven and accomplished professionals who bring their experience and expertise to
bear in steering the affairs of the Group, ensuring exceptional service to clients, job enrichment
to staff and increased returns to shareholders and all stakeholders. In August 2010, the Board and
Management of Enterprise Insurance Company (EIC) on August 12, 2010, were given the
mandate by their shareholders to re-organize Enterprise Insurance Co Ltd and the relationship
between the company and its subsidiaries.
The Enterprise Group currently has four subsidiaries that operate in and target different parts of
the financial services industry, namely Enterprise Insurance, Enterprise Life, Enterprise Trustees,
and Enterprise Properties. With an annual turnover of in GHS 132,288.00 2012, and a total asset
base of over 220 million Ghana Cedis, Enterprise is one of Ghana's Premier financial services
group.
Enterprise Insurance is the highest ranked general Insurer according to the prestigious GC100
(2011) and operates in the non-life insurance industry with products that include motor, fire,
home, marine among a host of other corporate and personal line insurances.
Enterprise Life is one of Ghana's fastest growing insurance companies and is the highest ranked
company (financial sector) in the Ghana Club 100 (2011).Enterprise Life has various products
including the Funeral Finance Plan among a variety of life products.
Enterprise Trustees is the pension subsidiary of the Group and provides world class pension
solutions under Tiers 2 and 3 of the National Pensions Act 766.

Enterprise Properties ensures the Group's assets are put to the best and most efficient use,
providing facilities that meet the strictest international standards while making a good return on
investment for shareholders.

Five years financial summary

Stock Analysis ( EIC and GGBL)

Date
E
2000 43.62
2001 12.96
2002
2003

2005

50.82
128.2
6
23.81
-14.3

2006

28.62

2007
2008

47.43
141.5
4
29.94
76.82

2004

2009
2010

2011
2012
2013
Total

25.49
20.83
291.6
7
595.
39

(E(GG
M
Em)
Gm)
(E-Em)2
-5.26
16.55
1.09 -63.09
1.19
0.11
11.42 29.57 -57.72
874.26
16.54
45.96
8.29 -41.29
68.76
438.1
154.67 85.73 380.27 7350.00
124.78
91.33 66.34
66.95 4400.71
-39.06
-29.72 56.83 -96.89 3229.41
19.48
5.21 13.91 -38.35
193.43
33
31.21
4.90 -24.83
24.03
62.6
58.16 99.01
4.77 9803.40
-32.5
-46.58 72.47 -90.33 5251.59
15.56
119.3
14243.9
32.25
5 -42.27
1
-1.92
-3.1 68.02 -59.75 4626.43
41.6
23.81 21.70 -16.23
470.80
136.64
249.1
62071.8
78.81
4
78.81
1
809.67 469.9
112609
8
.73

(G(E-Em)x(G2
Gm)
Gm)
3980.80
-68.91
3332.01
1705.16
144602.
56

1706.76
-342.41
32601.06

4481.82

-4441.08

9388.36

5506.25

1471.00
616.71

533.42
-121.74

22.72

471.93

8160.15

6546.28

1787.05

5045.26

3570.49

4064.31

263.53

352.23

6210.45
189592.
82

19634.00
71487.37

E=Stock EIC ; G= Stock GGL ;

Average E = Mean of Stock EIC =
Em ;
Average G = Mean of Stock GBL = Gm ;
Average M = Mean
of GSE Market = Mm

Average

E = E/n
= 595.39/14

Average

Em= 42.53
1 Variance E

G = G/n
= 809.67/14

Gm= 57.83

Average

M = M/n
= 469.98/14

Mm= 33.57
Variance G

2= (E-Em)2/n-1

2= (G-Gm) 2/n-1
= 189592.82/14-1
= 14584.06

= 112609.73/14-1
= 8662.29
2 STANDARD DEVIATION E

STANDARD DEVIATION G

E = 2

G = 2

= 8662.29

= 14584.06
=

= 93.07

120.76

3 Covariance EG
CovEG = (E-Em) (G-Gm)/n-1

=71487.37/14-1 =

5499.03

4 Correlation of Coefficient (r)

r= Cov

/(

EG

E)( G)

= 5499.03/(93.09)(120.76)
= 0.49
5 Coefficient of Determination (r2)

r2= (r)2
=(0.49)2 = 0.24
E
43.62
12.96
50.82
128.2
6
23.81
-14.3

(E-Em)

-5.26
0.11
16.54
438.1

16.55
11.42
45.96
154.67

1.09
-29.57
8.29
85.73

124.7
8
-39.06

91.33

-66.34

-29.72

-56.83

(M(E-Em)(M- (M(G(G-Gm)
(G2
Mm)
Mm)
Mm)
Gm)
(M-Mm)
Gm)
-17.02
-18.59 289.68 -63.09
1073.85 398
-22.15
654.93 490.62 -57.72
1278.58 333
12.39
102.74 153.51 -41.29
-511.63 170
121.1
10382.16 14665.
380.2
46050.26 144
21
7
57.76
-3831.67 3336.2
66.95
3866.83 448
2
-63.29
3596.64 4005.6 -96.89
6132.39 938

28.62
47.43
141.5
4
29.94
76.82
25.49
20.83
291.6
7
595.3
9

19.48
33
62.6

5.21
31.21
58.16

-13.91
4.90
99.01

-28.36
-2.36
24.59

394.43
-11.57
2434.71

-32.5

-46.58

-72.47

-80.15

5808.30

15.56

32.25

-119.35

-1.32

157.54

-1.92

-3.1

-68.02

-36.67

2494.21

41.6
136.6
4
809.6
7

23.81
78.81

-21.70
249.14

-9.76
45.24

211.77
11271.19

469.98

33646.78

2
804.29
5.57
604.67

-38.35
-24.83
4.77

1087.71
58.61
117.21

147
61
2

6424.0
2
1.74

-90.33

7240.24

816

-42.27

55.80

178

1344.6
9
95.26
2046.6
6
34267
.76

-59.75

2191.16

357

-16.23
78.81

158.44
3565.20

26
621

72364.65

189

6 Covariance EM
CovEM = (E-Em) (M-Mm)/n-1
=33646.78/14-1
=
2588.21
Covariance

GM

CovGM = (G-Gm)(M-Mm)/n-1
=72364.65/14-1
=
5566.51

7 Correlation between EIC and

GSE market

CovEM/(

E)( M)

Correlation between GGBL and GSE

market

CovGM/(

G)( M)

= 2588.21/(93.07)(16.31)
= 1.71

= 5566.51/(120.76)(16.31)
= 2.83

Coefficient of determination r2

Coefficient of determination r2

r2= (r)2
=(1.71)2 = 2.92

r2= (r)2
=(2.83)2 = 8.01
8 Variance M

2= (M-Mm)2/n-1
= 34267.76/14-1
= 2635.98
Standard Deviation of the market

M = 2
= 2635.98

= 16.31
9 Beta E

Beta G

E= CovEM/ m
= 2588.21/2635.98
= 0.98
10 Expected Return (Kd) E
KdE= Rf + E (Rm-Rf)

G= CovGM/ 2m
= 5566.51/2635.98
= 2.11
Expected Return (Kd) G
KdG= Rf + G (Rm-Rf)

KdE= Expected Return on stock KdE= Expected Return on stock

E
E
E= The degree at which
G= The degree at which
Stock E is more Volatile than
Stock GGL is more Volatile
the market average
than the market average
Rf= Risk free rate
Rf= Risk free rate
Rm= mean of the market
Rm= mean of the market
KdE= 25.2 + 0.9 (33.57-25.2)
=25.2+8.20
= 33.2

KdG= 25.2 + 2.11 (33.57-25.2)

=25.2+17.67
= 42.87

11 Jensens AlphaE
Jensens AlphaE = Total Portfolio

Jensens AlphaG
Jensens AlphaG = Total Portfolio

Return- Riskfree rate

Return- Risk free rate

[ Portfolio Beta(Market Return-

[ Portfolio Beta(Market Return-

Risk free)]

Risk free)]

= 42.53-25.2- [ 0.98(33.57-

= 57.58-25.2- [ 2.11(33.57-

25.2)]

25.2)]

= 9.137

= 14.97

12 Sharpe Index (SI) E

SI= Rp-Rf/

Sharpe Index (SI)G

SI= Rp-Rf/

SI= Sharpe Index

SI= Sharpe Index

Rp= Portfolio return

Rp= Portfolio return

Rf= risk free rate

Rf= risk free rate

E= Standard Deviation of the

G= Standard Deviation of

portfolio

theportfolio

SI= 42.53-25.2/93.07

SI= 57.83-25.2/120.76

= 0.19

= 0.27

13 Treynor Index E

Treynor Index G

TI= Rp-Rf/E

TI= Rp-Rf/G

TI= Treynor Index

TI= Treynor Index

Rp= Portfolio return

Rp= Portfolio return

Rf= risk free rate

E= the beta of the portfolio
TI= 42.53-25.2/0.98
= 17.68

Rf= risk free rate

G= the beta of the portfolio
TI= 57.83-25.2/2.11
= 15.46

Analysis of computation done on the Stock

Variance analysis

A variance of 8662.29 of stock E (EIC) indicates how far the stock returns are
from the mean (average return) of the stock. With a mean of 42.53 and a variance
of 8662.29, we can say that the amount of the stock returns is far from each other
and also far from the mean which also indicates that the difference is large and as
such there is a high volatility in stock EIC. This high volatility indicates that stock
EIC is a risky stock.

A variance of 14,584.06 for stock G(GGBL) also indicates that that there is high
volatility in stock GGL because of the distance it is from the mean. This indicates
that stock GGL is a risky stock. Comparatively, stock GGBL is riskier then stock
EIC.

Standard Deviation
A Standard Deviation of 93.07 indicates how much the returns of stock EIC has deviated
from the normal expected return (mean= 42.53). Like the variance, this is also a measure
of volatility which will be use as a gauge for the amount of expected volatility. A high
volatility of this stock (stdv=93.07) indicates that this investment is a risky investment.

A standard deviation of 120.76 indicates also indicates how much stock GGBL has
deviated from normal expected return (mean= 57.83). This large deviation indicates a
stock that is highly volatile. And because of it high volatility, we can say that this
investment is a risky investment. This investment is much risky as compare to investing
in stock EIC.

Covariance of EIC and GGBL

The Covariance of EIC and GGBL which is 5499.03 indicates the degree at
which the return of these two risky stock moves in tandem. Because the
covariance is positive, this indicates that the returns of these two
investments move together. If return on stock EIC is High, return on
Stock GGBL will also be high and the same can be said for low return.
This positive covariance indicates that that stocks are expose to similar
risk.
If we desire our portfolio to have a diversify earning, then

simultaneously including these two stocks in our portfolio must be

disallowed.

Correlation of Coefficient (r)

The correlation of Coefficient of stock EIC and GGL which is 0.49
indicates that there is a weak positive relationship between Stock EIC
and GGBL. This entails that if there is an increase in the returns of stock
EIC or GGBL there is a marginal increase GGBL or stock EIC and the same
for decrease in the returns.

Coefficient of Determination r2
A 0.24 coefficient of determination indicates that a 24% change in the
returns of stock EIC or GGBL is determine by the change in GGBL or EIC.

Covariance of EIC and GSE Market

The Covariance of EIC and GSE which is 2588.21 indicates the degree at
which the returns of EIC and GSE market moves in tandem. Because the
covariance is positive, this indicates that the returns move together. If
return on stock EIC is High, return on GSE market will also be high and
the same can be said for low return.
Correlation between EIC and GSE
market
This correlation of 1.71 indicates
that there is a perfect positive
relation between stock EIC and GSE
market. This mean that that for

Correlation between GGBL and GSE

market
This correlation of 2.83 indicates
that there is a perfect positive
relation between stock GGBL and
GSE market. This mean that that

every increase in GSE market,

there is a corresponding increase
in stock and the same for decrease.

for every increase in GSE market,

there is a corresponding increase
in stock and the same for decrease.

Variance of GSE market

The variance of 2635.98 indicates the volatility of the Ghana Stock
Exchange Market. Because of the high volatility, this indicates that the
market is a risky market.

Beta of EIC
A beta of 0.98 which is less than 1

Beta of GGBL
A beta of 2.11 which is greater

indicates that Stock EIC is less

than 1(market beta) indicates that

volatile then the market. Which

stock GGBL is more volatile than

also means stock EIC is less risky

the market. This entails that stock

than as compare to the market.

GGBL is 111% more volatile than

the market.

Expected Return (Kd) of EIC

Given the historical returns of the

Expected Return (Kd) of GGBL

Given the historical returns of the

stock EIC and associated volatility

stock GGBL and associated

(risk) of 0.98 and also taking in to

volatility (risk) of 2.11 and also

consideration the current risk free

taking in to consideration the

rate of 25.2, our anticipated rate of

current risk free rate of 25.2, our

return for this investment is 33.2%.

anticipated rate of return for this

investment is 42.87%.

Jensen Alpha EIC

Jensen Alpha GGBL

With the associated risk level

With the associated risk level

(0.98) of stock EIC, and a Jensen

(2.11) of stock EIC, and a Jensen

alpha of 9.14, it is evidently clear

alpha of 14.97, it is evidently clear

that stock EIC is earning excess

that stock EIC is earning excess

return. If this stock is selected, we

return. If this stock is selected, we

can beat the market by 9.14%.

can beat the market by 14.97%.

Sharpe Index EIC

This means that for every unit of

Sharpe Index GGBL

This means that for every point of

unsystematic risk, there is 0.19

return of Stock EIC, we are

excess return of Stock EIC. This low

shouldering 0.27 "units" of risk.

value of our Sharpe index relating

This low value of our Sharpe index

to our investment indicates that we

relating to our investment

are shouldering more risk to earn

indicates that we are shouldering

additional return

more risk to earn additional return

Treynor index EIC

A Treynor index of 17.8 indicates

Treynor index GGBL

A Treynor index of 15.46 indicates

that for every unit of systematic

that for every unit of risk there is a

risk there is a 17.68 excess return

15.46 excess return on our

on our investment. Comparatively,

investment.

this has a better performance on

risk adjusted basis because its
Treynor index value is larger than
Stock GGBL

Stock Valuation
In calculating the value of the stock, well the Gordon growth model. This model is a method
for calculating the intrinsic value of a stock, exclusive of current market conditions.

Intrinsic Value of the Stock EIC

P= D1/r-g
D1 = next year's expected annual dividend per share
Average of five year dividend= 0.292/5= 0.0584
r = the investor's discount rate or required rate of return
KdE = Expected return of EIC = r
g = present earning per share previous earning per share/ previous earning per share
= 0.29-0.24/0.24
= 0.21
P= 0.0584/0.43- 0.21
= 0.27

Comparing Intrinsic value to the market value (price of share) EIC

In determining if the stock is over value or under value, well compare the intrinsic value
of stock EIC in 2014 with the market price of the stock in that same year.
From the computation, the intrinsic value foe 2014 was 0.29, and the price per share in
2014 is 1.75 which indicates that the stock was overvalued in 2014

Intrinsic Value of the Stock GGBL

P= D1/r-g
D1 = next year's expected annual dividend per share
Average of five year dividend= 0.06/5= 0.012
r = the investor's discount rate or required rate of return
KdE = Expected return of EIC = r
g = present earning per share previous earning per share/ previous earning per share
= 0.041-0.086/0.086
= -0.52
P= 0.012/0.43- (-0.52)
= 0.013

Comparing Intrinsic value to the market value (price of share) EIC

In determining if the stock is over value or under value, well compare the intrinsic value
of stock GGBL in 2014 with the market price of the stock in that same year.
From the computation, the intrinsic value for 2014 was 0.013, and the market price per
share in 2014 was 3.69 which indicates that the stock was overvalued in 2014