Estimate the appropriate cost of capital for the firm

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Financial Performance Management Assignment

Please note that the company name for the assignment should have been Hudson's Bay Company (HBC.TO). The corrected assignment follows.

This is assignment is treated as an exam, so I will not be able to provide help with it.

Read questions carefully and restrict your answers to the assigned questions.

Company assigned: Hudson's Bay Company (HBC.TO)

You are required to undertake the following analysis;

1) Using appropriate financial analysis metrics and techniques, comment on the financial performance, trends and financial position of your company relative to its peers.

2) Estimate the appropriate cost of capital for the firm using the Capital Asset Pricing Model and Weighted Average Cost of Capital; provide clear explanation of the rationale for your estimates;

3) Provide a cash flow forecast-based valuation of the firm and compare the current share price to the one produced through your valuation. Assess the main factors that affect value using appropriate sensitivity analysis techniques;

4) On the basis of your valuation, do you recommend that your clients buy, sell or hold the stock? Provide a thorough analysis and well-supported argument to support your conclusions;

5) Assess the firm's distribution policy. Should it adjust its dividends or stock repurchases?

Each major section above will be weighted equally.

Your report should be not more than 4,000 words (not including tables and exhibits) and a spreadsheet showing your work must be submitted with the paper.

All sources must be appropriately referenced, appropriate use and references to relevant theory should be included.

Reference no: EM131305852

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