Question
Could anyone help me do this assignment ? I did the Starbucks Company and used the following; 1. Go to Yahoo Finance (http://finance.yahoo.com) and capture
Could anyone help me do this assignment ? I did the Starbucks Company and used the following;
1. Go to Yahoo Finance (http://finance.yahoo.com) and capture the income statement information for the company you selected. (Be sure that your company has debt on their balance sheet. This will be required in your project.)
a. Enter your companys name or ticker symbol. Your companys information should appear.
b. Click on the Financials tab, and select the income statement option. Three years worth of income statements should appear. Copy and paste this data into a spreadsheet.
c. Repeat step b. above for the balance sheets of the company.
d. Click on Historical Prices. Capture the closing price of the stock as of the balance sheet date for the three fiscal years used in steps b and c above.
2. Calculate the Weighted Average Cost of Capital (WACC) for the company:
a. Cost of Debt
Determine the market value of the firms debt issues. Be sure to review the firms 10-K. Also, the website http://finra-markets.morningstar.com/BondCenter may be of assistance.
You will need to calculate the firms composite YTM on its bonds. This can be achieved by calculating a weighted-average YTM for its bond issues.
After calculating the YTM for the bond issues, calculate the firms after-tax cost of debt. If the firms marginal tax rate cannot be identified in its 10-K, assume that the tax rate will be 35%.
b. Cost of Equity
Calculate the firms cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is ri = rf + i (RMkt - rf).
Assume the risk-free rate (rf) is the current rate of 10-year U.S. Treasury Bonds.
Calculate the market rate (RMkt) by calculating the market return on the Standard & Poors 500 for the past 2 calendar years.
The beta for the firm can be obtained from Yahoo! Finance.
c. Calculate the WACC
Determine the market capitalization of the firms common equity and preferred equity, if any.
Determine the firms capital structure based on the market value of the firms equity and debt. The market value of the firms debt can be obtained from the Morningstar website, listed in the Cost of Debt section above.
Calculate the WACC. As you recall, the formula for WACC is rWACC = E (E + D) rE+ D (E + D) rD(1 - TC).
Deliverable
Prepare a narrated PowerPoint presentation using VoiceThread or WebEx that shows the steps you performed to calculate the WACC for your firm. Feel free to embed your Excel spreadsheets in the presentation to demonstrate your calculations. Be sure to discuss how the values were obtained or derived to arrive at your WACC result. Finally, be sure to discuss any strengths or limitations in the calculations you performed, and discuss your analysis about the overall validity of your results. Both members of the team must be part of the narration in the presentation.
Once again, your team is the key financial management team for your company. The companys CEO is now looking to expand its operations by investing in new property, plant, and equipment. Your team recently calculated the WACC for your company, which will now be useful in evaluating the projects effectiveness. You are now asked to do some capital budgeting analysis that will determine whether the company should invest in these new plant assets.
The parameters for this project are:
Your team will be using the same company for this project that you used in the Week 6 project. The company is now looking to expand its operations and wants you to do some analysis using key capital budgeting tools to do this. The parameters for this project are as follows.
The firm is looking to expand its operations by 10% of the firms net property, plant, and equipment. (Calculate this amount by taking 10% of the property, plant, and equipment figure that appears on the firms balance sheet.)
The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipments cost.
The annual EBIT for this new project will be 18% of the projects cost.
The company will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use the same marginal tax rate that you used in the Week 6 project.
The hurdle rate for this project will be the WACC that you calculated in Week 6.
Deliverable for this Project
Prepare a narrated PowerPoint presentation using VoiceThread or Webex that will highlight the following items.
Your calculations for the amount of property, plant, and equipment and the annual depreciation for the project
Your calculations that convert the projects EBIT to free cash flow for the 12 years of the project.
The following capital budgeting results for the project
Net present value
Internal rate of return
Discounted payback period.
Your discussion of the results that you calculated above, including a recommendation for acceptance or rejection of the project
Once again, you may embed your Excel spreadsheets into your document. Be sure to follow APA standards for this project.
** I need it by tomorrow 5pm. 02/14/2018** Thanks you.
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