MN0491 Corporate Financial Management

Select a multinational company of your choice from the FTSE 100 index. Use the “Investor Relations” section of the website to download annual statements covering the most recent 5 year period.

Chosen company: Glaxosmithkline. 

The report structure should be as follows:

1. Evaluate and discuss the financial performance of the company over the period of analysis. As a minimum you must cover the following:
   1. Review of the income statements
   2. Working capital management policy
   3. Dividend policy
   4.  Historical share price performance (20 Marks)

2. Estimate the share price of the company by means of either Dividend Discount Model or Free Cashflow to Equity. For this task use the data on the Blackboard site to estimate the required rate of return based on the Capital Asset Pricing Model (CAPM). Please provide a brief analysis of the results. (40 Marks)

3. Discuss the capital structure of the company using the company’s balance sheet in the context of the Modigliani and Miller theories on capital  structure  and  prepare  a  constructive  critique  of  these theories. Your discussion should involve various balance sheet items such total equity, total debt, and other relevant information. (40 marks)