Corporate financial analysis and stock valuation study

Assignment Help Corporate Finance
Reference no: EM131549477

Corporate financial analysis & Stock Valuation Study

1. Download all the appropriate annual financial statements for Coca Cola (KO), Pepsi (PEP), and Dr. Pepper-Snapple (DPS) for fiscal years ending December in 2013, 2014, 2015 and 2016. My favorite source for these financial statements is www.finance.google.combut you can use any reliable source you want as long as you tell me where you get these financial statements.

2. Use the financial statements in Step 1 to calculate any 5 financial ratio you would find relevant.

3. Using the financial ratios you calculated in Step 2, try to understand why the rates of the three companies are very different. I want you to think about a story based on the financial ratios in Step 2 that would explain why, for example, Dr. Pepper-Snapple maybe in much better/worse shape than Coca Cola and Pepsi.

4. For each of the three companies find out the annual dividend payments made during the fiscal years ending on December, 2013, 2014,2015 and 2016.You can find the cash dividend payments in the Statement of Cash Flows.

5. For each year (2013, 2014, 2015 and 2016) calculate the internal and sustainable growth rates for each company. Also, calculate the average (over three years) internal and sustainable growth rates for each company.

6. For each of the three companies and their industry find out the expected (by analysts) growth rate of earnings for the next 5 years. For this purpose my favorite source is www.finance.yahoo.com, you can use the area called Analyst Estimates to get these numbers.

7. For each company, assume that dividends will grow at their expected growth rate for the next 5 years, and then at their average internal growth rate forever, calculate the value of the stock using the dividend growth model. Assume that the required rate of return is 15% for all three companies.

8. Find out the closing price of each stock at the end of December 2016. Under the same set of assumptions about the dividend growth in Step 7, find out the required rate of return implied by the closing price of each company.

9. Assume again that the required rate of return is 15% for each company. Assume that the dividends will grow at the expected growth rate for the next 5 years and at a constant rate thereafter. Find out the dividend growth rate after 5 years that is implied by the closing stock price of each company.

10. Your final report should be in a SINGLE WORD file that contains at least:

a. all the financial statements you downloaded as readable tables.

b. all the financial ratios you calculated as an easily understandable table.

c. a justification for each ratio you calculated and reasons why the set of ratios you used is sufficient and important for the purpose at hand.

d. a consistent story that compares Dr. Pepper-Snapple with Coca Cola and Pepsi based on the financial ratios you calculated. You have to make sure that any claim you make is based on data! Simple assertions do not carry any value even when they are correct.

e. a critical comparison of the stock valuation you obtained in Step 7 to the closing prices at the end of December 2015. Make sure to tell me whether each stock is over or undervalued. Your conclusions should be supported by the evidence provided by at the least: the financial statements and ratios, reverse-engineering conclusions in steps 8 and 9. Feel free to use any other source of information as justification for your analysis as long as you properly cite such sources.

A little hint: Wikipedia IS NOT a valid sourceregardless of the validity of information on that source. Furthermore, do not simply cite an analyst opinion without also reporting the analysis that led to the said opinion.

Attachment:- sample-paper.rar

Reference no: EM131549477

Questions Cloud

Write query that names of players whose salaries : Using the Master and Salaries tables, write query that names of players whose salaries were between $80,000.00 and $90,000.00
Do the images work together to form a coherent pattern : Do the images work together to form a coherent pattern? What ideas or feelings are conveyed by the images the author has selected?
What is the yield to maturity of this bond : A 6.1% coupon bearing bond pays interest semi-annually and has maturity of 5 years. If current price of bond is $1,140.56, what is the yield to maturity of bond
What name is given to the open ocean : What name is given to the open ocean? What level of ecology is concerned with groups of individuals of different species?
Corporate financial analysis and stock valuation study : Corporate financial analysis and Stock Valuation Study - find out the annual dividend payments made during the fiscal years
Example of application where radio buttons and check boxes : Give a simple example of an application where radio buttons and check boxes of GUI components might be useful.
What is the intrinsic value of equity and stock price : What is the firm’s value of operations? How many shares will remain after the repurchase? what is the intrinsic value of equity and stock price?
Network equipment in classroom : Document the computers, servers, and network equipment in your classroom. Design a form for gathering this information
Should the government allow online voting from home computer : Should the government allow online voting from home computers?

Reviews

len1549477

6/30/2017 4:46:14 AM

corporate financial analysis & Stock Valuation Study Detailed Question: see instructions in the file , then do the assignments similar to sample papaer & sample excel works Wikipedia IS NOT a valid source regardless of the validity of information on that source. Furthermore, do not simply cite an analyst opinion without also reporting the analysis that led to the said opinion.

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd