I need help with Part B please.

You are in the sell-side analyst team working for a brokerage firm. The firm has asked your team to make sell-side analyst report for the clients of the firm. The report is produced to help guide investment decisions. Sell-side analysts issue the often-heard recommendations of 'buy', 'hold', or 'sell' to help clients with their investment decisions.

The company you are asked to analyze in the report is OZ Mineral Ltd. (OZL.AX), a miner headquartered in South Australia which primarily explores for copper, gold, silver, nickel, iron oxide, zinc, and lead deposits.

Your analyst report should address the following requirements:

Part A - Qualitative Analysis Using economic, industry and firm-based analysis, estimate the potential and growth of the sector as well as OZL.AX. Are they able to achieve growth under the current economic climate? Part B - Quantitative Analysis 1. Provide a brief comment on the dividend policy of the firm. 2. Estimate the value (per share) of the company using the Free-Cash-Flow-to-Equity (FCFE) method. Part C - Conclusion/Recommendation You are required to make recommendation if your clients should either BUY/ SELL/ HOLD/. Using your findings from part (A) and (B), provide some justifications to your recommendations.

Tips and Traps:

1. It is not about getting the most accurate estimate. There is no one price otherwise the market price for all the companies will be static. It is about how you 'cook' your 'story'. State your assumptions and cite your references.
2. Part A, 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 cashflows.
3. Part B (i), you are only required to look up dividend paid by firm over the last 5 years. It is also a good exercise using the dividend discount model to investigate the multiples over the last few years. Apply your knowledge from FIN20014 on dividend policy.
4. Part B (ii), you are only required to look up FCFE for the firm over the last five years. The biggest challenge is finding the appropriate discount rate. Revise FIN20014 on the relevant topics early (i.e., risk-based models such as Capital Asset Pricing/Market models).
5. You should state your outlook horizon (2 or 3 or 5 years) in your justifications. Use the most recent financials available. When estimating your growth, you are only expected to use up to 5-year worth of historical data.
6. Some good starting points. For issues on applying FCFE, look up the group assignment resources on Canvas. You have learned about DCF approach in valuation from FIN20014. Topic 9 in this unit further discusses equity valuation. You may also wish to search Aswath Damodaran for his books or his website. Use DatAnalysis from Swinburne Library for financial data on the company. You may also wish to use Yahoo! Finance for this purpose.