Students will analyze the financial environment applicable to financial managers and individuals,
Students will apply corporate financial management concepts.
Students will analyze financial statements ratios and the relevance of the ratios for benchmarking,
Students will solve time value of money problems and understand present value and future value concepts.
Students will understand interest rates, bonds, and learn how to valuate bonds.
Students will understand the relationship between risk and return, and estimate the required return with the Capital Asset Pricing Model (CAPM),
Students will apply several valuation models to estimate firm value and stock value.
Task Description and Instructions
The mid-term project assesses you on Chapters 1-7. In this project, you need to select a public company and apply everything you have learned so far in this class to give an analysis. Your submission should include (not limited to):
Overview of the public company that you select.
Financial statements, i.e. the balance sheet and the income statement, and give a brief analysis of the company’s finances.
Step by step calculation of the free cash flow (FCF).
Financial ratio analysis: liquidity ratios, asset management ratios, debt management ratios, profitability ratios, etc.
Estimated required return on the company’s stock by using the capital asset pricing model (CAPM).
Stock valuation. Use one of the following valuation models:
FCF valuation model with a constant growth rate on FCF.
FCF valuation model with non-constant growth
Dividend valuation model with constantly growing dividend
Dividend valuation model with non-constantly growing dividend
You can upload a word or excel file. Either way, please explain your calculations and analysis in detail.