so much! I will give you up vote if you answer all the
question.
The purpose of this project is to apply this course's concepts
and theories to a comprehensive analysis of a publicly-traded
firm. The project assignment comprises four parts, as provided
below. Suppose that your client is the board of directors of a
large US conglomerate that is considering acquiring the company
that you have selected; they have hired your group as
consultants. In conducting the analysis, you may use any
sources you find helpful: textbook(s), public documents, academic
papers, discussions and analysis from internet sources, discussions
with classmates and/or professors, etc. However, the work you
submit must be your own in the sense that it represents your
group's own synthesis and analysis of information gathered from
multiple sources and is written in your own words. Be sure to
carefully document all your sources, calculations, and
assumptions.
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1 What is its beta? Here take 1 year of daily data (e.g., January 10, 2021 to January 10, 2022) from Yahoo! Finance on our firm and the S&P500. Regress the returns on the S&P500 returns. Does the CAPM work? (i.e., is the beta estimate plausible; is the RP > .20?) You must present a figure like below. Make sure to interpret the value of the beta. 0.04 y = 0.7545x + 0.0004 R2 = 0.3064 X 0.03 х 0.02 0.0% x * 0.03 1.01 X 0.02 0.03 -0.02 х X x -0.02 х х -0.03 х -0.04 х -0.05 SPX return
What is its alpha? Take the beta from the previous calculation and estimate the daily alpha and the cumulative alpha for the following year (e.g., January 10, 2021 to the present). Explain your results (has the firm done well or poorly)? 0.1 0.08 0.06 0.04 0.02 0 10/18/20 1/18/2014 18/2014 2/18/2014 11/18/2013 12/18/2003 alpha -cumulative alpha how
How do analysts view the firm? Look on the Yahoo Analyst coverage section and summarize the results. Are they favorable or unfavorable? Recommendation Trends Current Month 5 Strong Buy Buy Hold 7 6 1 Underperform Sell 1
Institutional and insider ownership. Look at the Yahoo Key statistics page. In general we would like high insider ownership (e.g. > 1%) to align owners and shareholders and high institutional ownership (e.g. > 60%) to show that professional investors like the company. 22,661,300 Share Statistics Avg Vol (3 month) 3: Avg Vol (10 day]3: Shares Outstanding 19,490,300 6.34B Float: 6.33B 0.02% 73.70% 56.69M % Held by Insiders! % Held by Institutions? Shares Short (as of May 30, 2014) Short Ratio (as of May 30, 2014)3: Short % of Float (as of May 30, 2014)3 1.80 0.90%
How good has its recent (accounting, like ROE, and stock price) performance been? Here you need to compute ratios like profit margin, ROE against the industry. The Yahoo Competitors page can help. Direct Competitor Comparison PFE MRK NVS SNY Industry 3.14B 172.73B 148.32B 192.45B 77,700 -0.02 50.33B 0.82 77,300 -0.01 43.55B 229.81B 135,000 0.03 59.33B 0.66 112, 128 0.01 973.00 0.11 42.94B 1.49B 0.63 0.67 0.54 15.95B 16.66B 117.12M Market Cap: Employees Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Operating Margin (ttm): Net Income (ttm): EPS (ttm) P/E (ttm): PEG (5 yr expected): P/S (ttm): 21.83B 0.32 13.22B 0.20 0.22 0.20 0.12 10.37B 5.61B 9.22B 5.37B N/A 3.22 1.52 3.92 1.95 0.54 9.42 24.16 29.01 24.28 39.50 4.27 2.20 1.87 1.97 4.22 3.79 3.97 3.86 3.43 3.57
2. Financial structure What is the firm's cost of debt? What is the firm's cost of equity? What is the firm's WACC? Gather information on the firm's fundamentals from public source (Yahoo! Finance, Bloomberg, etc.). Make sure to cite the source and provide supporting evidence. You must show your calculation, explain how you gathered relevant information, and interpret the values. 3. Relative valuation: How is the target priced relative to its comparable firms? Identify your target firm's competitors and compare their performances (both stock and accounting performances) to yours. Why did you choose your firm as an acquisition target among many other competitors? 4. Final analysis: Combine all of the previous 3 parts into a cohesive, succinct document (not exceeding 10 pages) including any qualitative factors Include a one-page executive summary: You must provide your conclusion - do you recommend that your clients should acquire the target? Why or why not? You must present your work for calculations and interpretation of the results, wherever possible.
. submit an Excel file that contains all work (including calculations and formulas as well as stock price data used to compute the beta and alphas) used to answer the questions. Answers without proper work in Excel provided will not receive any credit. Lastly, late submission will NOT be accepted. You must use your own words to answer each question. When you gather and present information obtained from external sources, you must provide appropriate citations and references. Submitting sentences or ideas as your own without proper acknowledgement or citation constitutes a violation of academic integrity (i.e., plagiarism). Each violation of such, if found in your submitted work, will trigger a penalty and multiple/repeated violations will result in a zero grade for the project for all group members involved.