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Trident FIN301 (module 1-5 SLPs)




Question;FIN301;SLP01;For this assignment, go to the Yahoo;Stock Screener and use this page to find a publicly traded company;that you find interesting. The;company should not be a bank or a financial institution of any kind including;insurance companies.;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.;FIN301;SlP02;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 the Yahoo Finance 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?;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.;FIN301;SLP03;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.;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 SLP04;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.;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.;FIN301 SLP05;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.


Paper#50802 | Written in 18-Jul-2015

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