FIN301
MOD1SLP
For this assignment, copy and paste the URL to your web browser
presented below.
http://screen.yahoo.com/stocks.html
Use this page to find a publicly
traded company that you find interesting and would like to
study for this class. The
company should not be a bank or a financial institution of any kind including
insurance companies.
Assignment Expectations:
Write a two to three page paper discussing what you find
interesting about this company, and whether or not you think this company will
have a successful future. Get to the company’s web
site, into the “investors relations” section and provide somefinancial highlights of your company for the past year.
Indicate which stock exchange the company is listed on and what was the past 12
month rate of return (% gain or loss) to investors who bought shares of
this company a year ago and sold the shares yesterday. This rate of return is
called the one-year Holding Period Return, or HPR. Also state what is the most
recent price of the shares on the company?
In addition discuss briefly some information about the top
management team including the CEO and CFO. If there are any issues
involved with the company that relate to the issues discussed in the case
assignment, mention them briefly as well.
FIN201 MOD2SLP
Assignment:
One specialized type of
security is called an equity futures. This is a contract that guarantees
you a share of a particular company to be delivered to you not today, but
sometime in the future, at a price that is determined by the market right
now. This price is usually called the futures price of the stock
(note – the term is plural – “futures”). If you ‘buy’ this futures,
you don’t pay for the shares now. You are actually signing a contract whereby you
are committed to pay that price in a particular date in the future, and you
are guaranteed to receive one share of the company at that time, irrespective
of its actual market price at that future date. Suppose for example
that the futures price of the XYZ company is $40. Suppose you ‘buy’ a
6-months futures contract. If six months later the share price is $45, you gain
$5 per share. If the market price in 6 months is only $35, then you lose $5.
Using this web page: http://screen.yahoo.com/stocks.html
Take a look at the five year
chart for your reference company(the one you chose for SLP1).
Using this chart and other information you can find on this company, write
a paper answering the following question:
What do you think would the futures
price of 100 shares of your reference company to be delivered to you in
one year be right now?
Assignment Expectations:
The paper is to be two pages
long. You DO NOT need to use complex mathematical formulas for this
assignments. Instead, think about how much do you think the market value of 100
shares of your company will be in one year? In considering the possible answer
please reflect also on the following:
Do you expect the price of the
shares in one year to be much higher? Or lower? Or only a little bit
higher?
How risky the stock is. Is its
price prone to wild swings up and down? Or has the price been relatively stable
the last few years?
What alternative investments
you have access to. What rate does your bank give you on a savings account or
certificate of deposit? The greater return you can get on other
investments, the less you would be willing to pay for an equity future.
FIN201 MOD3SLP
Assignment:
Using Yahoo!
Finance find the value of beta for your reference
company. Write a two page paper discussing the following items:
a. What is the
estimated beta coefficient of your company? What does this beta mean in terms
of your choice to include this company in your overall portfolio?
b. Given the
beta of your company, the present yield to maturity on U.S.
government bonds maturing in one year (currently about 4.5% annually) and an
assessment that the market risk premium (that is – the difference between the
expected rate of return on the ‘market portfolio’ and the risk-free rate of
interest) is 6.5%, use the CAPM equation in order to find out
what is the present ‘cost of equity’ of your company? Explain what is the
meaning of the ‘cost of equity’.
c. Choose two
other companies, look up their “Beta” and report the names of these
companies and their betas. Suppose you invest one third of your money in each
of the stocks of these companies. What will the beta of the portfolio be? Given
the data in (b), what will the Expected Rate of Return on this portfolio be? Do
you feel that the three-stock portfolio is sufficiently diversified or does it
still have risk that can be diversified away? Explain.
Assignment
Expectations:
In a two-page report
explain your answers thoroughly with references to the background
materials. Make sure to demonstrate a strong understanding of the concept
of beta and the risk/return trade off.
FIN301 MOD4SLP
Assignment:
Every company has capital projects. The company you have
selected must need something! Be it a new wing to the building, a new
product line to be funded, a new piece of equipment, find one new acquisition
your company needs.
Once you have identified the new possible investment item, what
problems are you going to have in estimating the cash flow that might be
emanating from the initial investment and problems in getting it funded?
Issues might be:
·
Risk
·
Cost
·
Politics (getting it through
committees)
·
Public Relations
·
etc.,
Identify a potential
capital project for your company describe such a project and write a short
summary of the problems you see in getting the funding to see it through.
Assignment Expectations:
The paper should be two to three pages in length, and should have
references to the background materials or other sources you found for this
paper. It must discuss both the estimates of the initial investments and the
annual incremental after-tax cash flow that is expected to emanate from the
investment.
FIN201 MOD5 SLP
Assignment:
Examine the structure
and activities in your organization and identify two projects or events that
required an investment. One should be a ‘current project’ and the other
long-term investment project.
For each project or
event, identify the preferable source of funding. You may not have access to the actual source of
funding so limit your paper to the source YOU feel is most
appropriate. Then explain why you feel that source is most
appropriate.
Assignment
Expectations:
Your explanation is the
most important part of this paper. Your should include references to the
background materials or other articles and a discussion of the main concepts of
this module as they relate to your choice of funding.
The paper should be two pages in length.
