Question
I understand that this may seem to have incomplete data, but this is my last attempt. I don't know how to give any other info
I understand that this may seem to have incomplete data, but this is my last attempt. I don't know how to give any other info to you, as this is all that is provided to me. Please consider trying to give any help possible for this question, as I am stuck! Using the most current financial statements of Autotrader, im having a hard time calculating the WACC, with the below stated information. I need to compose a report using Autotrader as the selected company, And I would appreciate some talking points to add to the report. Please attach any financial records to reference to this explanation. Please advise me the best way to explain these explanations. The main goal is to calculate the WACC, and ways to increase shareholder value. Thank you
You are now a Chief Financial Officer of a large, publicly traded company at Autotrader.From the company's website, go to the financial section and examine the financial statements (income statement, balance sheet, and statement of cash flows) and10K and 10Q reports, and conduct a financial ratio analysis including the following:current ratio, debt to equity ratio, return on equity (ROE) ratio, dividend yield, earnings per share (EPS or the last 4 quarters), price to earnings ratio (P/E), and market to book ratio. Compare these ratios to those of the company'snearest competitor (True Car).
Assume that the objective of upper management is to maximize shareholder value by increasing the price of the stock. Describe the subjective impacts (threats, opportunities, competitive edge) that are unique to the firm and its industry that you found in your research.
Based on the ratio results and research, from the following list of ways to financially engineer an increase in stock price, evaluate each method, examine its pros and cons, and then select the best ways for the firm to increase the stock price. Be as specific as you can by using qualitative assessments without proprietary company information:
- Capital expendituresnew equipment, plant, machinery, marketing/advertising campaign, computer infrastructure (only choose if your research of the firm has discovered some specific opportunity here).
- Merger/acquisition of a competitor.
- Stock repurchases.
- Dividend policy changeincrease, decrease, stock split, stock dividend.
- Reduction of debt.
- Expansion into a new geographic market.
- Introduction of new products/services.
Autotrader ($) Truecar ($)
Current Ratio 25.74 6.14
debt to equity ratio 351.73 0.066
return on equity 36.07 -8.17
earnings per share (eps or the last 4 quarters) 13.65 -0.06
price to earnings ratio 25.74 0.00
market to book ratio 55.51 2.73
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