Corporate Finance

learnt during the semester and writing a full report. In your report you need to include all what you have learnt in the course. You may also include charts and screenshots from finance.yahoo.com. 1. Go on [login to view URL] and select a stock listed in U.S. stock markets. 2. Answer the following questions: What is the most recent stock price listed for the chosen stock? What is the beta for the stock? What is the market value of equity, or market capitalization? How many shares of stock does the firm has outstanding? What is the most recent annual dividend? What is, according to market analysts, the growth rate of earnings for the next 5 years. 3. Use the dividend discount model to find the cost of equity of the company. 4. On [login to view URL], follow the “Bonds” link. What is the yield on three-month Treasury bills? 5. On [login to view URL], search for S&P 500 index. Under Historical data, collect monthly prices for the last 5 years on an excel sheet. Calculate the monthly returns. What is the average annual return of the market? Estimate the market risk premium. 6. what is the cost of equity for the company using CAPM? 7. You now need to calculate the cost of debt for the stock. Go to [login to view URL], enter the name of the company, and find the yield to maturity for one of the recent bonds issued by the company. 8. On [login to view URL], find the book value of equity (total shareholder’s equity) and the book value of Long Term Debt in the balance sheet (under financials). Represent the capital structure of the firm in a pie chart. 9. You now have all the necessary information to calculate the weighted average cost of capital for the chosen stock. Calculate this using book value weights and market value weights, assuming the company has a 35 percent marginal tax rate. Which number is more relevant? In writing and structuring your final report you are required to adhere to the following guidelines: 1. Cover page 2. Executive summary 3. Introduction and objectives Note: In addition to introduction and objectives include here a brief description of the selected stock (company profile, market, industry, charts…). 4. Methodology(s) for the calculations and other relevant analytical procedures. Note: This section should include all formulas, screenshots and tables used in the calculation and as well as a full & detailed analysis and explanation of your findings and results. 5. Conclusion, recommendations and learning outcomes. 6. List of references General comments a. All students within the same group are responsible for the overall project, including analysis and interpretation of results and the whole structure of the final group’s report. b. I expect that different groups will choose different stocks. c. Plagiarism will not be tolerated. You need to indicate clearly the references for all the report’s content. Groups submitting identical sections/reports will be penalized regardless of who did the work. d. There is no page limit of the final report, however the contents should be meaningful and to the point and include the items discussed above. e. I will be available to discuss more details on the group project during office hours. f. The submission should be made in blackboard before the due date. No exception will be granted under any circumstances. g. The deadline for submission is Sunday November 26 at 10 AM