Questions

Please select one of the following three companies as the company you will study

• Graincorp Limited (GNC)
• Ruralco Holdings Limited (RHL)
• Select Harvests Limited (SHV)

Take the current share price to be the price at the close of trading on Friday 21st September 2012.
1. Describe what the company’s main businesses are. [This must be done in your own words, not by copying something from the company’s web-site or annual report].
2. Answer the following:
a. Who is the chairman of the company, and what is his/her background?
b. Who is the Chief Executive Officer of the company, and what is his/her background?
c. How many shareholders does the company have?
3. Calculate the following, based on the current share price (i.e. as at 21st September 2012):
a. Market capitalisation.
b. PE multiple (based on full-year earnings for the latest full-year results reported)
c. Dividend yield (based on the dividend for the latest full-year earnings reported).
d. The Bid-Ask spread [This can be done on any day between Friday 21st September and Friday 28th September 2012. In your answer, state what the Bid and Ask prices were.]
e. Enterprise value (EV).
f. EV/EBIT multiple based on the latest set of full-year results.
g. EV/EBITDA multiple based on the latest set of full-year results.
h. The P/NTA multiple based on the latest set of full-year results.
4. Calculate:
a. Days inventory
b. Days accounts receivable
c. Days accounts payable
d. Operating cycle
e. Cash cycle

for at least the last five (5) years for Ruralco and ten (10) years for the other two companies.

Compare your results to the other two companies and draw suitable graphs to compare them. Comment on your results, and in particular on any similarities or differences.

Note, irrespective of which company you choose to do this assignment on, for Question 4 you need to do calculations for Ruralco for at least five years and for Graincorp and Select Harvests for at least ten years.
5. Calculate the Weighted Average Cost of Capital (WACC) for the company, assuming a pre-tax cost of debt of 7.0%.
6. Estimate the value of one share in the company, using the Gordon Dividend Growth Model.
7. Suppose you are an equities analyst working for a stockbroking firm. Would you recommend that your firm’s clients invest in the company? Why or why not?

Questions
After reading the attached article on the long-term political legacies of colonialism, answer the following eight questions:
1)    Identify the independent and dependent variables.                           (1 point)

2)    On p. 908, the author lists five factors that influenced the value taken by the independent variable in a particular country. How do you think each of these factors influences, if at all, the relationship between the independent and dependent variables?            (1.5 points)

3)    What are the criteria for a country’s inclusion in the author’s sample? How many countries fulfil these criteria to enter the sample?                           (1 point)

4)    How does the author measure the independent and dependent variables?              (1 point)

5)    The author includes five control variables in his regression models. List them and explain why they are needed.                                          (1.5 points)

6)    Table 1 lists the results of four regression models. Focus on the aggregate score for the dependent variable.
(a)    Is the relationship between the independent and dependent variables statistically significant? How do you know this?
(b)    How do the four models differ? Does significance change across these models?
(c)    Observe the variation in the adjusted R-squared for the four models. Explain why this variation might exist.
(d)    How would you interpret the intercept in these models?                     (2

points)

7)    For the dependent variables analyzed in Tables 2 and 3, the regression coefficient for the independent variable tends to lose statistical significance in Model 4. At the same time, the control variables in some models are statistically significant. In the context of this article, how do we interpret these counterintuitive results?                        (1 point)

8)    From the tables and the author’s analysis of them, highlight and explain the principal findings in the article.    Do you find them persuasive? Why or why not?               (1 point)

Questions
After reading the attached article on the long-term political legacies of colonialism, answer the following eight questions:
1)    Identify the independent and dependent variables.                           (1 point)

2)    On p. 908, the author lists five factors that influenced the value taken by the independent variable in a particular country. How do you think each of these factors influences, if at all, the relationship between the independent and dependent variables?            (1.5 points)

3)    What are the criteria for a country’s inclusion in the author’s sample? How many countries fulfil these criteria to enter the sample?                           (1 point)

4)    How does the author measure the independent and dependent variables?              (1 point)

5)    The author includes five control variables in his regression models. List them and explain why they are needed.                                          (1.5 points)

6)    Table 1 lists the results of four regression models. Focus on the aggregate score for the dependent variable.
(a)    Is the relationship between the independent and dependent variables statistically significant? How do you know this?
(b)    How do the four models differ? Does significance change across these models?
(c)    Observe the variation in the adjusted R-squared for the four models. Explain why this variation might exist.
(d)    How would you interpret the intercept in these models?                     (2

points)

7)    For the dependent variables analyzed in Tables 2 and 3, the regression coefficient for the independent variable tends to lose statistical significance in Model 4. At the same time, the control variables in some models are statistically significant. In the context of this article, how do we interpret these counterintuitive results?                        (1 point)

8)    From the tables and the author’s analysis of them, highlight and explain the principal findings in the article.    Do you find them persuasive? Why or why not?               (1 point)