Project-
To make FINM321 as relevant as possible, we have devised the following project based on actual market information for a specific company.
This years' assignment must be completed in groups of two. You can decide who you want to have as a group member.
The information provided to you was compiled by market specialists and includes the 2010 set of audited annual financial statements, market analyst information as well as information freely available in the market. This information is freely available to any market participant and was therefore given to you with very little changes.
Carefully go through the required (see required section) and see what is expected of you. All information required to complete the project is given to you, therefore it is not necessary to make any assumptions as part of the calculations.
As most of you aspire to be professionals one day, we would expect that the project should be professionally completed and each question should be on a separate page. Please make use of MS Word and MSExcel. Show all your calculations. In light of the above-mentioned, a certain number of marks will be allocated to the presentation and neatness of the work handed in.
Required-
1. Calculate the cost of equity using
- Capital asset pricing model (CAPM)
- Dividend growth model
For purposes of the next questions use the Keas calculated in the CAPM.
2. Calculate the cost of debt.
3. Calculate the weighted average cost of capital based on market values. Only include equity and long term debt in your calculation.
4. Value each share of the company based on
- Dividend growth model
- PE Ratio
The calculation should take into account that the investment period is for 10 years.
5. State what you think the value of each share should be based on the calculations above. Also indicate whether you think the current share price is at a discount or premium to the current share price in the market.
Attachment:- FINM321 Project.rar