Suppose you are a financial analyst and you have been asked to analyzean ASX listed company. Your
Question:
1) Discuss how successful the company has been at maximizing stakeholders value over analyzing period.
2) Analyze the company's share price history and traded volumes over the analyzing period, it can be over the past 12 months, 2 years, or 5 years.
3) Calculate the return for investing in the company both short term and long term and identify the main causes of its volatility in return over the corresponding holding period. The discussion of volatility should consider economic-wide and firm-specific factors.
4) Apply the valuation technique(s) taught in this course and undertake a current valuation of the equity for your company. Based on your calculation, would you recommend a prospective investor to buy, hold or sell this security and why.
5) Analyze the company's dividend policy. Should the company follow a progressive dividend policy? Critically evaluate factors that are affecting corporate dividend policy and how your company's dividend policy may have influenced its capital structure and share price.
6) Analyze the company's capital structure. How would you describe the current capital structure for your company and justify with reasons that should potential investors view this company as a favourable investment choice?
7) Based on the attempt to all of above questions conclude whether your company is an attractive investment opportunity. You should clearly explain all of your assumptions used in the valuations and estimations and critical discuss the limitations of your analysis and any other risks that may affect investors' decision making. Note: There are over 2,000 companies listed on the ASX, thus your graders expect that it is unlikely two groups will be investigating the same company. It is the graders expectations, that we see analysis of a variety of different companies from the different groups covering different dates.
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk