You are expected to do an in-depth financial analysis of the corporation allocated to you using any financial database (and the publicly available annual reports of that corporation – if needed) and write a valuation report on that corporation (max length 2000 words).

You are required to address the following issues in your assignment:
1.
Evaluate your corporation’s return and risk profile and examine the sources of risk. Critically analyse your findings and make recommendations.
2.
Analyse the capital structure of your corporation. Estimate the cost of debt and the required return on equity for your corporation using the approaches presented in the lectures. Calculate the Weighted Average Cost of Capital (WACC).
3.
Payout policy. Report on what the payout policy has been for your corporation over the past three years. It may include a dividend or buyback programme as a means of rewarding shareholders. Critically analyse the payout policy adopted by your corporation (dividend payout ratio vs retained earning ratio and so on), and discuss if and how this affects the valuation models you are using for your equity asset valuation.

4.
Corporate valuation. You are expected to determine whether the market price of your corporation can be justified. Connection to information from questions 1 to 3 will be a good starting point to frame your analysis. You will have to find the intrinsic value of your corporation equity using a Multistage Dividend Discount Model (DDM), Free Cash Flow to the Firm (FCFF)/ Free Cash Flow to the Equity (FCFE) Models, Methods of Comparables, Residual Income Model. Assess whether the company is fairly valued, overvalued or undervalued at the time of writing your report by comparing the market price for your company on that day with your calculated intrinsic value.

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