Business & Finance homework help.
Task:
Create an 8-10 page report in which you examine a major public company and provide a recommendation on how shareholder value could be enhanced, with resulting impact on the firm’s capital structure and stock value.
Introduction
This portfolio work project will illustrate what potential financial strategies can be employed by firms to impact company valuation and how they should be financed. This is a relevant concept for both large and small companies. You will have a chance to apply the skills expected of an MBA graduate; from the financial management perspective, you should be able to:
- Utilize financial strategies that will increase the price of stock.
- Calculate WACC and capital structure.
- Evaluate how financial strategies impact the capital structure.
This assessment requires you to examine a major public company and provide recommendations on how shareholder value could be enhanced, with resulting impact on the firm’s capital structure and stock value. You will estimate the firm’s current WACC.
Scenario
Fast forward to when you have successfully completed the MBA program. You are now a Chief Financial Officer of a large, publicly traded company at (go ahead and insert your dream company here). Using your dream company, conduct extensive research on the current situation of the company using resources like the Wall Street Journal, Bloomberg, GuruFocus, Yahoo Finance, EDGAR, and the Capella library. As the CFO, you have been given a project by the CEO and Board of Directors to prepare a report on ways to financially engineer the company to increase stock price.
From the company’s website, go to the financial section and examine the financial statements (income statement, balance sheet, and statement of cash flows) and 10K and 10Q reports, and conduct a financial ratio analysis including the following: current ratio, debt to equity ratio, return on equity (ROE) ratio, dividend yield, earnings per share (EPS or the last 4 quarters), price to earnings ratio (P/E), and market to book ratio. Compare these ratios to those of the company’s nearest competitor.
Assume that the objective of upper management is to maximize shareholder value by increasing the price of the stock. Describe the subjective impacts (threats, opportunities, competitive edge) that are unique to the firm and its industry that you found in your research.
Based on the ratio results and research, from the following list of ways to financially engineer an increase in stock price, evaluate each method, examine its pros and cons, and then select the best ways for the firm to increase the stock price. Be as specific as you can by using qualitative assessments without proprietary company information:
- Capital expenditures—new equipment, plant, machinery, marketing/advertising campaign, computer infrastructure (only choose if your research of the firm has discovered some specific opportunity here).
- Merger/acquisition of a competitor.
- Stock repurchases.
- Dividend policy change—increase, decrease, stock split, stock dividend.
- Reduction of debt.
- Expansion into a new geographic market.
- Introduction of new products/services.
Your Role
You are the Chief Financial Officer of your selected company.
See attachments for requirements and scoring guide!!!
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Requirements.docx
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ScoringGuide.pdf