support@essaywritingexpert.orgThe company you are researching are based on the years 2021 to 2022
The balance sheet can be found saved on desktop and summarised on the document
Assume that you are working in the corporate financial advisory services department of a large investment bank and your director (who has read extensively about shareholder value analysis) has asked you to prepare a shareholder value analysis and a short-term valuation report on your chosen company using the following basis for your valuation:
- Planning period is to be set at five years
- A residual value based on constant cash flows from year five onwards (infinite life) will be estimated at the end of this five-year period
- Beta factor to be obtained using current information held on Bloomberg, DataStream or other sources (the beta I found is wrong- try correct if not forget it)
- FTSE All-share return to be taken as10%
- Risk free rate to be taken as 5%
- The target capital structure to be set based on the company last financial year (preferably 2023)
- The gross cost of debt over the financing period is to be estimated at 6% per annum
- As for the other key value drivers (forecast sales growth rate, operating margins, tax rate, incremental working capital requirements and incremental fixed asset investment) you are required to decide these yourselves. (COMPLETED)
The director has advised you to review the latest annual report and accounts of your chosen company and use the data therein and other financial journalistic analysis and intelligence that you consider appropriate to help you decide upon the growth levels of your chosen drivers.
QUESTION 1(700 words)
-Find WACC
-Discounted Cash Flows: Discount the forecasted cash flows to their present value using the WACC.
-Terminal Value: Estimate the terminal value based on constant cash flows from year five onwards.
-Purchase Price: Calculate the present value of the forecasted cash flows and terminal value to determine the purchase price of the company.
– Justify Growth Levels of Value Drivers: Justify the growth levels of certain value drivers, such as sales growth rate, operating margins, tax rates, and incremental working capital and fixed asset investments, based on the company’s strategic plans, industry analysis, and economic outlook.
– write A short report explaining how the valuation method works and the purpose of each stage in the spreadsheet calculations should support the shareholder analysis value model (this might mean you have to find the PV, for the report insert the finalised information into humata ai and ask it to write up an analysis based on the data + make sure humata uses citations and reference everything at the end – check plagiarism)
QUESTION 2 (300 words)
Review the certain value driver’s assumptions given above and growth levels suggested by you for other drivers and write a brief report justifying or criticising the growth levels of the chosen drivers.