The Signature Assignment is your opportunity to demonstrate what you learned throughout the course. I realize the course has students who range from financiers to business owners to students learning about finance for the first time. Given that, the signature assignment has two options: Option 1 requires students to write about lessons learned in modules 5-8. Option 2 requires students to write a signature assignment, which requires students to build on the entire project beginning with module 1 (see recommendations section on the home page for each module). Even though some students may not select option 2, I highly encourage all students to try to work on the recommendations in each module in order to strengthen their knowledge of finance.

Signature Assignments

Option 1: You are to choose a publicly-traded company that has actively traded over public exchanges for a minimum of 10 years. Make sure the company has some type of international influence, e.g., Multi-National Corporation (MNC) or international personnel assigned to the organization if it is based in the U.S Imagine you are hired as a consultant to render services to a publicly-traded company. As a new MBA finance wizard, you have been asked to show your vast knowledge of finance by providing a discussion regarding the operations of finance to the new hires of the company you selected. Please address the following in your paper:

Corporate finance as it relates to analysis and decision-making, The theoretical underpinnings of modern portfolio theo, Evaluation of financial risks and associated measurements, Assessment of risk and ethics in an international setting relative to finance and investments

Writing guidelines

Write 8-10 pages in APA format utilizing at least 5 references from the Touro library Ensure you have an introduction with a purpose statement, main topics are addressed logically and coherently, and the conclusion ties everything together (add 2-3 sentences in the conclusion with a summary of what you learned). Double-space throughout the paper, with 1 inch margins all around Your paper should be based on what you have learned and supported by literature (i.e., do not generalize) Include a title page and reference page, which is not included in the 8-10 page count. Add tables and graphs to strengthen your paper (where applicable)

Option 2:

For this assignment, you will need to complete the recommendations found on the homepages for modules 1-8. The company you will use is Coca-Cola (Symbol: KO, Websites: https://ca.finance.yahoo.com/q?s=KO&ql=1; http://www.coca-colacompany.com/; http://www.cocacola.com) listed on New York Stock Exchange. Again, you should have completed a portion of the signature assignment on a weekly basis according to the recommendation at the end of each home page. The Threaded Discussion (TD) should have also helped you in the process. The readings for each module are also helpful to complete the signature assignment. To complete the Signature Assignment, feel free to use the Readings and Background Material for each module, search for additional information and then write an 8 to 10 pages (double spaced with Time New Romans Font 12 excluding title page and references) report on the Coca-Cola Company. Make sure you address the questions and tasks that were listed in each module's home page under recommendations. I have listed the questions below that you were recommended to address by module.

Module 1: Start your signature assignment with the title “Introduction”, describe the purpose of the report, provide a business summary (https://ca.finance.yahoo.com/q/pr?s=KO) in the introductory section, and then add more information by responding to the following questions:

i) Did Coca-Cola Company issue any of the following securities during previous years? If yes, what is the dollar amount of each for year 2013 per Balance Sheet?

Convertible bonds ,Warrant, Common shares, Preferred shares

Websites: https://ca.finance.yahoo.com/q/bs?s=KO&annual; http://assets.coca-colacompany.com/d0/c1/7afc6e6949c8adf1168a3328b2a d/2013-annual-report-on-form-10-k.pdf (see Balance Sheet, page 76); http://www.coca-colacompany.com/investors/ ii) As a financial manager, how would you decide the prices of bonds and shares of the Coca-Cola Company? Hint: PV of future cash flows = Price of a security

Module 2: iii) Are capital budgeting methods that we discussed in week 2 useful for the Coca-Cola Company to make capital budgeting decisions? Which capital budgeting method is the best? Why? Please explain your reasoning.

Modules 3: iv) Is Capital Asset Pricing Model (CAPM) useful for the Coca-Cola Company to analyze the cost of equity capital? As a financial manager of the Coca-Cola Company, would you use CAPM? Why? Why not? Is there any other model(s) that can be used instead of CAPM? Assume that expected rate of return on market portfolio is 7% and use CAPM to calculate cost of equity (RE) for the Coca-Cola Company.

Rf = Risk free rate of return, treasury bill rate/yield (or treasury bond rate) [use LT COMPOSITE (>10yrs), http://www.treasury.gov/resource-center/data-chart-center/interestrates/Pages/TextView.aspx?data=longtermrate] E(Rm) = Expected rate of return on market portfolio v) Does differences among the weak, semi-strong, and strong forms of the efficient market hypotheses apply to the Coca-Cola Company? How?

Module 4: vi) What is the purpose of calculating Weighted Average Cost of Capital (WACC)? Assume that the Coca-Cola Company is planning to expand more in the Indian market by opening another Coca-Cola plant which will generate $20,000,000 free cash flow per year for the next 5 years and you are provided the following information: -New debt capital (bond sales) = -New common equity capital = $20,000,000 -Time to maturity = 15 years -Coupon rate (RD) = 6% -Face value = $100,000 Current bond yield = 4.42% 50,000,000 -Expected dividend per share after one year of operations (D1 ) = $2 -RE = Cost of equity capital (use RE that you calculated in week 3) -Corporate tax (Tc ) = 35% What is the WACC of Coca-Cola Company? What is the net present value (NPV) of the project that the Coca-Cola Company is planning to start? Based on NPV, what would you recommend to Coca-Cola Company? WACC = WERE + WDRD(1-Tc ) V (total value) = New common equity capital + New debt capital WE (percentage of equity) = New common equity capital / V WD (percentage of debt) = New debt capital / V NPV = -Initial cash outflow + Total present value (PV) of cash flow (CF) PV of Multiple Cash Flow (CF) = CF1 / (1+r)1 + CF2 / (1+r)2 + CF3 / (1+r)3 + CF4 / (1+r)4 + CF5 / (1+r)5 To Calculate NPV, you can use either Annuity Factor or PV of Multiple CF. Annuity factor:{1 – [1 / (1+r)t ]} / r PV factor = 1 / (1+r)t t =Time (number of year); time to maturity for bonds (number of years) r = WACC (discount rate/cost of capital) vii) Based on the expected dividend of $2 per share, what is the minimum price of the Coca-Cola Company share? What is the price of the $100,000 bond? Share price (p) = D1 / r r = Cost of capital (WACC) D1 = Dividends at time period one Bond price (p) = PV of coupon payments + PV of face value Coupon payment = Face value x Coupon rate PV of coupon payments = Coupon payment x {1 – [1 / (1+r)t ]} / r PV of face value = Face value x 1/(1+r)t

Module 5: viii) Now please assume that the sales price (SP) of one case of Coca-Cola in the Indian market will be $4, variable costs (VC) per Coca-Cola case will be $2, and fixed costs (FC) of the plant will be $100,000 per month. Based on this information, what is the break-even point (BEP) in units? BEP = FC / (SP-VC) ix) Can sensitivity analysis be useful for the Coca-Cola Company to have accurate cash flow (CF) forecasting? How?

Module 6: x) We know from week 5 that the Coca-Cola Company will require $50,000,000 equity capital and $20,000,000 debt capital. Would adding debt capital in the capital structure help the Coca-Cola Company in maximizing shareholders' wealth? How? Please explain your reasoning. Would initial public offering be a best method to raise equity capital in India? Why?

Module 7: xi) What are the most important risks that the Coca-Cola Company may face in by operating in India? How can these risks lead to financial losses for the Coca-Cola Company? How can the financial risk be managed?

Module 8: xii) Please prepare the final copy of the signature assignment project and submit it.

Writing guidelines Write 8-10 pages in APA format utilizing at least 5 references from the Touro library Ensure you have an introduction with a purpose statement, main topics are addressed logically and coherently, and the conclusion ties everything together (add 2-3 sentences in the conclusion with a summary of what you learned). Double space throughout the paper, with 1 inch margins all around Your paper should be based on what you have learned and supported by literature (i.e., do not generalize) Include a title page and reference page, which is not included in the 8-10 page count. Add tables and graphs to strengthen your paper (where applicable)