- 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.