Hoose any company and i have to approve the company from my instructor
Read the instruction carefully
This project will allow you to apply the concepts and tools covered in the class. In this report, you will present an estimate of your companyas cost of capital, and the intrinsic value of the firm and its stock. This report involves:
1. Select a company with the following characteristics:
a. it should not be a brokerage house or finance related firm.
b. only select firms which have their Beta listed in finance.yahoo.com, and have long term debt (non-convertible debt) in their capital structure.
c. it should have its stock and bond prices quoted in finance.yahoo.com.
d. its Free Cash Flow (FCF) in 2012 is positive.
2. Presenting the following by estimating (do not forget to answer the questions listed under c below):
a. The firmas WACC
b. The intrinsic value of the firm and the common stock.
c. Write a paragraph on each of the following issues:
what can the firm do to lower their cost of capital
if you had any money to invest in this firm now, why would you or not invest in this firm based on where you see this firm.
3. Keeping in mind the following presentation style:
State in clear and simple terms how you came up with all estimates. Identify all the assumptions and models used to derive the estimates. As far as it is relevant to the presentation of the estimates, explain the workings of these models. Keep the report clear and concise.
In order to present these estimates, you will need to calculate:
a. The firmas cost of equity using: CAPM or Discounted Cash Flow (DCF) models
b. The firmas cost of long term debt and preferred stock
c. Cost of capital of the firm (WACC)
d. The intrinsic value of the firm and its common stock
1. A firm may be analyzed by only one group. You should select a firm and inform me of your selection as soon as possible.
2. You can easily find the data needed for this report by using online resources such as finance.yahoo.com, morningstar.com, marketwatch.com, bloomberg.com etc.
3. Your grade on the report will be based on the completeness and accuracy of your estimates (40%) and the explanation of your work and assumptions (60%).
4. The deadline to submit your work to me through e-mail is June 6th. Late projects are subject to point deductions.
5. the work has to be done in Excel Sheet.
6. I will attach an example to help you how to start the project.