Please use the Eagers Automotive Ltd (APE) annual report 2020 and find the followings:

https://www.eagersautomotive.com.au/wp-content/uploads/2021/04/Annual-Report-2020.pdf

1. CAPM calculations

- Calculate CAPM correctly

-JUSTIFYthe number of the CAPM figures (I.e. if used internet source why did you use, was the right time frame etc)

- CorrectlyIDENTIFYthe Government bond rate

- Your Rm is the same as section 3

- Include a time frame table and the time frame was appropriate

2. DGM calculations

- DGM calculation was correct

- Correctly identified dividend for the model i.e. no special and

once off dividends.

- Dividend are without franking credit.

- Correctly identified P0

- Correctly identified all figures

- Calculated G correctly

- If G is negative attempted to use alternative method and explain the implications of a negative G and alternative method on the DGM.

3. Calculation of Rd

-Investigaterates for Rd

-Referenceall sources of rates for Rd

-Identifyand give an in-depth analysis on the maturity (only long term debt), security (are they secured), variability (different type of security and their characteristics) and rate (what is your base rate) from annual report

-Showworking out for the base rate

-Identify/calculate YTM on bonds

- Rank loans in terms of risk and discussed the ranking system.

-Apply a reasonablemargin on the loans

- Give anin-depth justificationon the margin added to the loan

4. WACC and Analysis

- Give an in-depth discussion whether you used CAPM or DGM

model

- Give adetailed analysison the Rd Vs Re

- Calculate WACC Correctly

- SuccinctlydiscussWACC (how it fitted with your observations with the capital projects)

- Include page number of annual report where the information was obtained from

- Contain no irrelevant material

Answer rating: 100% (QA)

Here is my revised analysis of Eagers Automotive Ltds WACC based on their 2020 annual report 1 CAPM ... View the full answer