I require you to provide all financial data in Excel file format. A good rule of thumb: if you are typing a lot of words, use “Doc”…if numbers, use Excel. And you are encouraged to deliver 2 files (Doc and Excel) when such is appropriate.

Week 7 requires you to go to online sources to collect data for your firm’s debt (bonds). Please note that this data (a firm’s outstanding bonds and their prices) is the MOST SECRETIVE data on Wall Street. For the most part, online sources will not have such data……..spend, at most 90 minutes, searching the various sites. If you find such data, use it. If not, come up with some other estimate for the current cost of debt. One idea….take ‘long term debt’ (Balance sheet item) and divide by interest exp (Income statement item) to get cost of debt. Or … provide some other estimate and outline any and all assumptions to come up with this number.

Week 7 also requires you to use the dividend discount model. If your company has “regular growth” now and going forward, you can use the “Constant Growth model” (a.k.a. “Gordon Growth Model”). If your company is experiencing hyper-growth, you will be required to estimate future dividends until a constant growth model takes over. An example is also included in the Excel file attached here.

Week 7’s analysis requires you to calculate a firm’s value according to various (textbook) formulas. Your answers may or may not be near a current firms value/stock price. Therefore, you are not attempting to get an identical answer. You are then required to compare/contrast the formula value with ‘real world values’

Category: Essays