Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can I get some help with this assignment please. I provide the financial statement (income statement) needed to complete it along with an example of

Can I get some help with this assignment please. I provide the financial statement (income statement) needed to complete it along with an example of how it should be done image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
-The assignment requires a copy of the latest annual report (10K) of your assigned company. You will need to use the financial statements portion to complete the assignment, which can be obtained through several sources. Some major sources include: 1) The company's Investor Relations Department. 2) A business library, such as the Baruch College Library or the Business and Science Library in New York City. 3) The company's web site, where a copy can usually be downloaded directly. 4) A web site that accesses EDGAR, the SEC's corporate filing center. This can be accessed from Yahoo (under the company's profile) or through sites such as Free EDGAR (www.freeedgar.com) and EDGAR Online (www.edgar-online.com). 5) An annual report service, which is provided by major financial information companies such as Dow Jones. -A pro forma Income Statement must be prepared in MS Excel, using a minimum projection of three years, as based on pro forma pojections diseussed in Chapter I8. You need to include the most recent income statement for your company that is part of the 10K. This information can then be used to calculate the fair value of the company' s stock price, as based on the stock valuation formulas discussed in Chapters 7 and 10. All assumptions and formulas used for the pro forma projections and the company's fair value must be included at the end of your model. Onee a fair value is reached, this can be compared to a recent quote of the company's stock price to determine whether or nor the company is farly valued at its most recent trading price. A separate attachment provides an example of how this should be constructed. (v) Getaccess to 40+ years of historical data with Yahoo Finance Plus Essential. Learn me Finance Home yahoo: finance Search for news, symbols or companies XYZ Corporation Earnings Model Income \& Pro Forma income Statements 12/31/20 and PF12/31/21 to 12/31/23 Earnings Model Projections and Assumptions: -Pro forma sales growth is 15% per year - Common Size values are calculated as a percentage of sales, unless noted otherwise -DPS is calculated as Dividends/ 100 Million Shares Outstanding -The required return is 20% The value of this company is calculated as PO=D1/(1+r)+D2/(1+r)2+D3/(1+r)3+P3/(1+r)3 Where P3=D3(1+g)/r=g or D4/rg Using the Projections from XYZ Corporation's Earnings Model. PO=2.52/(1+0.20)+2.90/(1+0.20)2+3.34/(1+0.20)3+36.70/(1+0.20)3WhereP3=$3.67/0.200.10PO=$2.10+$2.01+51.93+$21.39PO=$27.28 Where P3=$3.67/0.200.10 PO=$2.10+$2.01+$1.93+$21.39 P0=$27.28 -Once an estimated value is established, there are three possible vi scenarios when it is compared to a recent quote; as follows: -The assignment requires a copy of the latest annual report (10K) of your assigned company. You will need to use the financial statements portion to complete the assignment, which can be obtained through several sources. Some major sources include: 1) The company's Investor Relations Department. 2) A business library, such as the Baruch College Library or the Business and Science Library in New York City. 3) The company's web site, where a copy can usually be downloaded directly. 4) A web site that accesses EDGAR, the SEC's corporate filing center. This can be accessed from Yahoo (under the company's profile) or through sites such as Free EDGAR (www.freeedgar.com) and EDGAR Online (www.edgar-online.com). 5) An annual report service, which is provided by major financial information companies such as Dow Jones. -A pro forma Income Statement must be prepared in MS Excel, using a minimum projection of three years, as based on pro forma pojections diseussed in Chapter I8. You need to include the most recent income statement for your company that is part of the 10K. This information can then be used to calculate the fair value of the company' s stock price, as based on the stock valuation formulas discussed in Chapters 7 and 10. All assumptions and formulas used for the pro forma projections and the company's fair value must be included at the end of your model. Onee a fair value is reached, this can be compared to a recent quote of the company's stock price to determine whether or nor the company is farly valued at its most recent trading price. A separate attachment provides an example of how this should be constructed. (v) Getaccess to 40+ years of historical data with Yahoo Finance Plus Essential. Learn me Finance Home yahoo: finance Search for news, symbols or companies XYZ Corporation Earnings Model Income \& Pro Forma income Statements 12/31/20 and PF12/31/21 to 12/31/23 Earnings Model Projections and Assumptions: -Pro forma sales growth is 15% per year - Common Size values are calculated as a percentage of sales, unless noted otherwise -DPS is calculated as Dividends/ 100 Million Shares Outstanding -The required return is 20% The value of this company is calculated as PO=D1/(1+r)+D2/(1+r)2+D3/(1+r)3+P3/(1+r)3 Where P3=D3(1+g)/r=g or D4/rg Using the Projections from XYZ Corporation's Earnings Model. PO=2.52/(1+0.20)+2.90/(1+0.20)2+3.34/(1+0.20)3+36.70/(1+0.20)3WhereP3=$3.67/0.200.10PO=$2.10+$2.01+51.93+$21.39PO=$27.28 Where P3=$3.67/0.200.10 PO=$2.10+$2.01+$1.93+$21.39 P0=$27.28 -Once an estimated value is established, there are three possible vi scenarios when it is compared to a recent quote; as follows

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing real issues and cases

Authors: Michael C. Knapp

9th edition

978-1133839552, 113383955X, 1133187897, 978-1133710424, 1133710425, 978-1133187899

More Books

Students also viewed these Accounting questions

Question

What conflicts of interest had to be resolved?

Answered: 1 week ago