Ramsay Health Care Limited (RHC.AX) was founded in 1964 and listed in the ASX in 1997. The principal activity of Ramsay Health Care is providing healthcare services across Australia, the United Kingdom, France, Indonesia and Malaysia. The company facilities cater for a range of health care needs covering day surgery, complex surgery, psychiatric care and rehabilitation. As a company analyst for DEBANAWAZA Stockbroker Ltd, you are expected to prepare an analysis on the company. Your report should be brief, but concise, and should be within the limit of 2000 word or no more than 8 pages. Your report should contain the following sections. I. Estimate the value (per share) of the company using the Free-Cash-Flow-to Equity (FCFE) method.(15 %) II. Provide a brief comment on the dividend policy of the firm.(5 %) Using economic, industry and firm based analysis, estimate the potential and growth of the sector as well as RHC.AX. Are they able to achieve growth under the current economic climate? You are required to make recommendation if your clients should either BUY/SELL/WAIT/HOLD/OVERWEIGHT or UNDERWEIGHT. Please provide some justifications [using your findings from part (a) and (b)] to your recommendations. Some general advice: It is not about getting the most accurate estimate. There is no one fixed price otherwise the market price for all the companies will be static. It is about how you build your "story". State your assumptions and cite your references. Part A (i), you are only required to look up FCFE for the firm over the last two years. The biggest challenge is finding the appropriate 'discount rate'. Revise on the relevant finance topics learned previously (i.e. internal based models such as Weighted Cost of Capital, WACC or Risk based models such as Capital Asset Pricing/Market models are fine). Part A (ii), you are only required to look up dividend paid by firm over the last 2 years. It is also a good exercise using the dividend discount model to investigate the multiples the market was over the last few years. Apply the knowledge learned previously on dividend policy. Part B, instead of merely stating facts about the economy, industry and the firm, provide some analysis. Make a judgement call on how these facts will affect the company's operation, profitability and most important of all. growth and cash flows. Differentiate between company analysis and stock report Company analysis can include anything a company does. Stock report, is whatever you include would have an impact on the price of the stock. You should state your outlook horizon in your justifications. (1 year or 2 years?) Use the most recent financials available (2015 and 2016). When estimating your growth, you are only expected to use 2 years' worth of historical data and forecast 1 year ahead. Your clients are usually very busy people. As such, use the marks allocated to guide you for the allocation of words. A picture pains a thousand words. Use graphs where necessary, but remember to link your discussions to/from the graph. If you did not discuss anything about the graphs/charts, then it is better not to include them. Some good starting points: For issues on applying FCFE, look up Ashworth Damodaran for his books or his website. Try to make use of FinAnalysis and DatAnalysis databases that are available from the library. Ramsay Health Care Limited (RHC.AX) was founded in 1964 and listed in the ASX in 1997. The principal activity of Ramsay Health Care is providing healthcare services across Australia, the United Kingdom, France, Indonesia and Malaysia. The company facilities cater for a range of health care needs covering day surgery, complex surgery, psychiatric care and rehabilitation. As a company analyst for DEBANAWAZA Stockbroker Ltd, you are expected to prepare an analysis on the company. Your report should be brief, but concise, and should be within the limit of 2000 word or no more than 8 pages. Your report should contain the following sections. I. Estimate the value (per share) of the company using the Free-Cash-Flow-to Equity (FCFE) method.(15 %) II. Provide a brief comment on the dividend policy of the firm.(5 %) Using economic, industry and firm based analysis, estimate the potential and growth of the sector as well as RHC.AX. Are they able to achieve growth under the current economic climate? You are required to make recommendation if your clients should either BUY/SELL/WAIT/HOLD/OVERWEIGHT or UNDERWEIGHT. Please provide some justifications [using your findings from part (a) and (b)] to your recommendations. Some general advice: It is not about getting the most accurate estimate. There is no one fixed price otherwise the market price for all the companies will be static. It is about how you build your "story". State your assumptions and cite your references. Part A (i), you are only required to look up FCFE for the firm over the last two years. The biggest challenge is finding the appropriate 'discount rate'. Revise on the relevant finance topics learned previously (i.e. internal based models such as Weighted Cost of Capital, WACC or Risk based models such as Capital Asset Pricing/Market models are fine). Part A (ii), you are only required to look up dividend paid by firm over the last 2 years. It is also a good exercise using the dividend discount model to investigate the multiples the market was over the last few years. Apply the knowledge learned previously on dividend policy. Part B, instead of merely stating facts about the economy, industry and the firm, provide some analysis. Make a judgement call on how these facts will affect the company's operation, profitability and most important of all. growth and cash flows. Differentiate between company analysis and stock report Company analysis can include anything a company does. Stock report, is whatever you include would have an impact on the price of the stock. You should state your outlook horizon in your justifications. (1 year or 2 years?) Use the most recent financials available (2015 and 2016). When estimating your growth, you are only expected to use 2 years' worth of historical data and forecast 1 year ahead. Your clients are usually very busy people. As such, use the marks allocated to guide you for the allocation of words. A picture pains a thousand words. Use graphs where necessary, but remember to link your discussions to/from the graph. If you did not discuss anything about the graphs/charts, then it is better not to include them. Some good starting points: For issues on applying FCFE, look up Ashworth Damodaran for his books or his website. Try to make use of FinAnalysis and DatAnalysis databases that are available from the library