OBJECTIVE In this part of the project you are to assume to have been hired to join a team serving as an internal financial analyst to THE COMPANY. Your client

OBJECTIVE In this part of the project you are to assume to have been hired to join a team serving as an internal financial analyst to THE COMPANY. Your client plans to invest in bonds and (or) stocks issued by THE COMPANY (SELECTED BY INSTRUCTOR). In part 6 of the assignment you are asked to provide some recommendations to THE COMPANY’S management. THE COMPANY for part 2 of the project can be the company that you were using for the Research Project Part 1 or ANOTHER COMPANY determined by your professor. THE COMPANY for this part of the project must have listed on the website . To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS. Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include SUGGESTED WEBSITES – To find the information for your company you need to type the stock symbol in the window to get into the company’s page. – To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS. . To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH. -To find the information for your company you need to type the stock symbol in the window to get into the company’s page. -To find the information for your company you need to type the stock symbol in the window to get into the company’s page. – To find the information for your company you need to type the stock symbol in the window to get into the company’s page. – Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol” to get into the company’s page. – To find the information for your company you need to type the stock symbol in the window to get into the company’s page. Company’s websites Using the information from the websites the student will develop evaluation of bond and stock performance for THE COMPANY (SELECTED BY INSTRUCTOR). (The evaluation portion will total 85% of the assignment grade) -1—Background and Industry (one paragraph). -2- a) Find the ratios for THE COMPANY assigned for you of the project for the last 3-5 years in the Internet. Present these ratios as the table(s) in your project. b) Write (about) 1 page of the analysis of the ratio results. In your analysis you should answer the following questions. How is THE COMPANY financing its assets? Discuss how much risk is associated with the bonds issued by the company? How can this risk be measured? explain. The information on bonds can be found on the website . To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS. Another useful website on bond information is . To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH. Copy the quotations of bonds issued by THE COMPANY (SELECTED BY INSTRUCTOR) that contain the Price. Present these quotations in your project. 1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. These ratios are available on > Company’s page – under Valuation, Financials, and under Dividends -2) Analysis of the historical stock prices trend for the last year. 3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project. 1. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate, beta, and the market return. a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets – U.S. Treasury Bonds Rates.  You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Discuss how appropriate this rate is as a measure of risk. b) Between 1926 and 2017, the compound annual rate of return of S&P 500 is estimated a 6.5%. We will use this number as the market return. Discuss how appropriate this rate is as a measure of return. c) Beta is listed in and in on the company’s front page. is the beta listed for the company? does it mean? d)  Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line. 2. There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the Dividend Payout Ratio on > Company’s page – under Financials and under Dividends Calculate the company’s sustainable growth rate. 3. Apply the Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock. 4. Compare the result of your calculations with the current stock price. Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Why? – , as to whether the assigned company’s recent trend in financial and stock performance is of sufficient financial strength to warrant entering in a long-term investment in bonds and/or stocks of the company. Explain your answer (about 1 page) -6- Think about the financial strategy of the company, how to best balance THE COMPANY’S financial leverage to optimize shareholder wealth going forward taking into consideration the company’s current market position, credit rating, dividend policy, etc. the students should write a paragraph in their own words reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace. -Organization, Format and Presentation of Paper including the Title page, Introduction, Body, and Summary. Each section of the paper must begin with a sub-heading. use the sub-headings included in the assignment (4% of the project grade) Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3% of the project grade) Logical and Smooth Flowing Transitions and Relationships among Sections of the Written Report (3% of the project grade) Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)