DEADLINE SEP 8 MIDNIGHT. I WILL PAY 90 IF DONE 11:30PM
1. Calculate and discuss ratios: liquidity, leverage, asset turnover, debt, ROA, ROE, and market value ratios for H. J. Heinz (HNZ) for last three years, compare and comment about them. 2. Sum the three years cash flow in each of the three categories and comment on where the firm generated cash and used cash, as well as financed the business. 3. Calculate the dividend growth rate for your company using time value of money tools (use annual dividend payments). Then using the Gordon Constant Dividend growth formula find the value of the firm’s stock and compare to current valuation, i.e. the fiscal year end stock price. Discuss if the stock is over or undervalued based on your calculation compared to you constant growth model valuation. 4. To use the constant growth model you will need the required return for the company. You will find the required return on equity using the CAPM. Assume the risk free rate is 3.6%, and the Expected return of the market is 11%. You will use the CAPM required return found here in #e below. 5. Calculate the Free Cash Flow for your company for the three annual years’ financials. Calculate forward three years of FCF growth based on the growth for the past three years, and then assume that FCF will grow thereafter at 5% to find the terminal value in year three projection. Discuss stock valuation using the free cash flow method with terminal valuation methods. Use a multi-stage FCF model for valuations. USE THIS METHOD TO FIND THE ANSWER i. Find the discounted value of the firm (i.e. this is the entity value). ii. You will need to calculate the WACC for the firm to calculate the discounted cash flow. Be sure to use the cost of debt for only borrowed money in the WACC calculation, and remember to calculate the capital structure percentages based only on debt, equity & preferred stock, if in your company has preferred. No current liabilities (other than Notes payable) are included in the capital structure. Find the forward cap structure: i.e. the % debt, % preferred stock and % equity. These weights are used in the WACC. iii. Follow the methodology in your text book about the entity valuation of the firm and equity valuation. (e.g., you will subtract from the entity value the firm and subtract value of borrowed- money debt). This subtraction will give you the value of equity. Now calculate the per share value of the FCF valuation by dividing the equity value by the number of shares outstanding. Assume neither changes in the shares outstanding nor equity issuance for the future. iv. Compare your FCF valuation of equity per share to the market value per share (at fiscal yearend) and discuss why they may be different? Discuss whether your company is over or undervalued relative to your calculations. 6. Considering the firms’ history of capital expenditures and shareholders’ distributions, offer your recommendation for the firm’s dividend policy? 7. Summary and recommendation regarding the future of this stock: Be sure to use all of your analysis to support your position, i.e., ratios profits, debt ratios etc. i. Based on your analysis, including the over or undervaluation: 1. Is the stock a good buy, average buy, or a poor buy (implying a good sell)? 2. Include a justification of your recommendation based on your analysis and research. Do not use equity research in your paper; include only your research in the paper.
DEADLINE SEPTEMBER 8TH MIDNIGHT i will pay $90 if i get it at 11pm