FINA860 financial management

For that company, you are required to use the most recent financial year statements and five years of monthly price data, and the past dividend information provided to do the following:

a) Identify each of the company’s debts, in a table list each debt, the amount of that debt and the interest rate (there should be detail on debt in the notes to the financial statements).

b) What is the book value and market value of equity?

c) Determine the debt/equity ratio and compare it against the company's industry peers. (For industry peers, use Thomson Reuters Eikon to identify 2-3 ‘peer’ companies for your firm. These should be firms in the same industry, ideally based in the same country. For each peer firm, calculate the debt/equity ratio for the most recent financial year.)

d) Based on your answer to c), what do the similarities or differences from the company’s industry peers tell us?

a) Calculate the cost of equity based on the CAPM. (The data for Market Price and Risk-Free rates is provided on Blackboard.)

b) Calculate the cost of debt (hint, you can calculate average cost of debt by dividing the interest expense by total interest-bearing debt).

c) Calculate the weighted average cost of capital.

d) Calculate the free cashflow to the firm.