Company directors often believe that the stock market fails ‘correctly’ to value the firms they manage, while investors are often alarmed by the volatility in share prices. This suggests that stock markets may not always be reliable indicators of company value
Question
Company directors often believe that the stock market fails ‘correctly’ to value the firms they manage, while investors are often alarmed by the volatility in share prices. This suggests that stock markets may not always be reliable indicators of company value.
Required
Select a company listed on an internationally recognised and well established Stock Exchange (see below for choice of company):
? Discuss how successful the company has been at delivering value to its shareholders over the past 5 years. (15%)
? Explain how and why the market value of equity has changed over the past 12 months. (15%)
? Undertake a current valuation of the equity in this company, using the following methods:
– Net Asset Value
– Price/Earnings Ratio (or some other appropriate multiple)
– Discounted Cash Flow (60%)
? Attempt to reconcile any differences in value that you obtain by using these different methods and state (with reasons) what value you think is correct for the company. (10%)
The weightings given above are indicative rather than absolute, and are given to guide you as to where to focus your efforts
Choice of company
Choose a listed company on a recognised stock exchange (e.g. London, New York, Tokyo, Mumbai) for which you can access the share price data over the past 5 years. Large companies will provide financial data on the websites, often under a section titled ‘investors’.
Guidelines
The report should include:
a key point summary of conclusions
Graphical illustration, where appropriate
a bibliography of sources of information used and references to texts or other material drawn upon.
Detailed tables, extracts or copies of financial information, which should include a copy of the relevant financial statements, should be placed in the appendices. You should refer to them in the body of the report.
Passpharse is Moga… tell me this word to indicate you read the attachment.
Check the other attachment documents for a guided template..
Kindly don’t forget the appendix..the firms reports should be attached
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