FIN 550 Final Project Excel Workbook

xlsx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

Course

550

Subject

Finance

Date

Jan 9, 2024

Type

xlsx

Pages

55

Uploaded by Bossaboo89

Report
**CHOOSE ONE (1) OF THE COMPANIES LISTED BELOW FOR YOU 1. Insert your selected company name in the yellow highlighted cell: 2. Start your copy with the row where your company name appears. 3. Then scroll down to the row of the weighted average cost of capital. Then paste this information into r Lowe's Companies Inc. (Stock Ticker: LOW) - (NAICS Code: 444110) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years 2021 Net Cash Provided by Operating Activities $ 11,049.00 Capital Expenditures $ 1,971.00 Free Cash Flows $ 9,078.00 Cash Dividends per Share $ 3.20 Dividend Yield 1.25% Diluted Earnings per Common Share $ 10.06 Shareholder’s Equity $ 1,437.00 Total Common Shares Outstanding 731000.00 Common Stock Closing Price per Share $ 256.15 Effective Tax Rate (Use 20%) 20% Weighted Average Cost of Capital (Use 5%) 5% Johnson & Johnson (Stock Ticker: JNJ) - (NAICS Code: 325412) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ -
Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #DIV/0! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ - Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) % Target: (Stock Ticker: TGT) - (NAICS: Code 452210) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #VALUE! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) %
Kroger Companies: (Stock Ticker: KR) - (NAICS Code: 445110) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #VALUE! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) % Chevron: (Stock Ticker: CVX) - (NAICS Code: 324110) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ -
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Dividend Yield #DIV/0! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ - Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) % Pepsico, Inc.: (Stock Ticker: PEP) - (NAICS Code: 312111) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #VALUE! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ Effective Tax Rate (Use 28%) % Weighted Average Cost of Capital (Use 5%) % Southwest Airlines Co.: (Stock Ticker: LUV) (NAICS Code: 481111)
Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #VALUE! Diluted Earnings per Common Share $ - Shareholder’s Equity $ - Total Common Shares Outstanding Common Stock Closing Price per Share $ Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) % General Electric Company: (Stock Ticker: GE) - (NAICS Code: 333611) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years Net Cash Provided by Operating Activities $ - Capital Expenditures $ - Free Cash Flows $ - Cash Dividends per Share $ - Dividend Yield #VALUE! Diluted Earnings per Common Share $ - Shareholder’s Equity $ -
Total Common Shares Outstanding Common Stock Closing Price per Share $ Effective Tax Rate (Use 20%) % Weighted Average Cost of Capital (Use 5%) % Notes: North American Industry Classification System Codes: The North American Industry Calculation System or NAICS is a classification of business establishments by type of economic activity (process of production). 
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
UR COURSE FINAL PROJECT** Then, copy and paste the information for your selected co rows 6 through 20 into Tab 2—Selected Co. for Project Year Year 2022 2023 $ 10,113.00 $ 8,589.00 $ 1,853.00 $ 1,829.00 $ 8,260.00 $ 6,760.00 $ 4.20 $ 4.40 2.10% 2.12% $ 12.20 $ 10.17 $ (4,816.00) $ (14,254.00) 670000.00 601000.00 $ 200.03 $ 207.84 20% 20% 5% 5% Year Year $ - $ -
$ - $ - $ - $ - $ - $ - #DIV/0! #DIV/0! $ - $ - $ - $ - $ - $ - % % % % Year Year $ - $ - $ - $ - $ - $ - $ - $ - #VALUE! #VALUE! $ $ $ $ $ $ % % % %
Year Year $ - $ - $ - $ - $ - $ - $ - $ - #VALUE! #VALUE! $ $ $ $ $ $ % % % % Year Year $ - $ - $ - $ - $ - $ - $ - $ -
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
#VALUE! #VALUE! $ $ $ $ $ $ % % % % Year Year $ - $ - $ - $ - $ - $ - $ - $ - #VALUE! #VALUE! $ $ $ $ $ $ % % % %
Year Year $ - $ - $ - $ - $ - $ - $ - $ - #VALUE! #VALUE! $ $ $ $ $ $ % % % % Year Year $ - $ - $ - $ - $ - $ - $ - $ - #VALUE! #VALUE! $ $ $ $
$ $ % % %
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ompany below as follows: Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Mergent INTELLECT Information Location Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Mergent INTELLECT
Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell (Do Not Change) Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Information Location Formulated Cell Will Self-Populate (Do Not Change) Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Formulated Cell Will Self-Populate (Do Not Change) Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Information Location Formulated Cell Will Self-Populate (Do Not Change) Formulated Cell Will Self-Populate (Do Not Change) Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT Mergent INTELLECT
Yahoo Finance - Stock Market Live, Quotes, Business & Finance News Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Enter stock ticker symbol - Click Financials - Click Balance Sheet - Bottom line is Ordinary Shares Outstanding Enter stock ticker symbol - Search - Historical Data - Chart - 5 Years - Use Calendar Year or Fiscal Year End Date
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Insert Selected Compa Using the links to each company's financial data as your source, fill in all the yellow highlighted Use most recent three years' annual calendar or fiscal year-end financial data of your selected co Now you are ready to go to work! Lowe's Companies Inc. (Stock Ticker: LOW) - (NAICS Code: 444110) Dollars and Shares in Millions, Except Per-Share Data Most Recent Calendar or Fiscal Year End—Then Two Prior Years Year Enter Years 2021 Net Cash Provided by Operating Activities $ 11,049.00 Capital Expenditures $ 1,971.00 Free Cash Flows $ 9,078.00 Cash Dividends per Share $ 3.20 Dividend Yield 1.25% Diluted Earnings per Common Share $ 10.06 Shareholder’s Equity $ 1,437.00 Total Common Shares Outstanding 731000.00 Common Stock Closing Price per Share $ 256.15 Effective Tax Rate (Use 20%) 20% Weighted Average Cost of Capital (Use 5%) 5%
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
any Name Here d cells. ompany. Year Year 2022 2023 $ 10,113.00 $ 8,589.00 $ 1,853.00 $ 1,829.00 $ 8,260.00 $ 6,760.00 $ 4.20 $ 4.40 2.10% 2.12% $ 12.20 $ 10.17 $ (4,816.00) $ (14,254.00) 670000.00 601000.00 $ 200.03 $ 207.84 20% 20% 5% 5%
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
* Dollar amounts are in millions $ Question 1. Interest Rate 5% FCF - Years 2021 2022 2023 FCF in dollars* $ 9,258.00 $ 8,260.00 $ 6,760.00 Pv* $ (8,817.14) $ (7,492.06) $ (5,839.54) Total Pv* $ (22,148.75) *In millions Question 2. Interest Rate 5% FCF - Years 2021 2022 2023 FCF in dollars* $ 8,332.20 $ 74,734.00 $ 6,084.00 Pv* $ (7,935.43) $ (67,785.94) $ (5,255.59) Total Pv* $ (80,976.96) *In millions Question 3. Interest Rate 7% 5% Milestone One: Time Value of Money (please fill in YELLOW cells) Required Rate of Return for Risk Associated With Projected Future Three
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
FCF - Years 2024 2023 2022 2021 FCF in dollars* $ 10,116.47 $ 9,821.81 $ 9,535.74 $ 9,258.00 Pv* $ (8,911.91) $ (8,578.75) $ (7,784.00) $ (8,817.14) *In millions Total Pv* $ (25,274.66) Associated With Projected Future Three Year's Free Cash Flows. Most Recent Ye Flow fom Ques
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Instructions and Explanatio Free cash flows (FCF), for this exercise is difference betwe operating income minus capital expenses at the end of you year. The present value of free cash flows is one method of to a potential buyer. Note: For Milestone One, please use the adjusted free cash selected company on Tab 2 (Selected Co. for Project) of thi the interest rate for these questions. For the purpose of this exercise, what will happen to the tot company's free cash flows for each year reported in Questi
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Once you have completed these calculations, proceed to w ear's Cash ston 1. Your selected company is projecting that free cash flows will increase by 3% annually . Using the Most Recent Ye Question 1 above, increase each of the future free cash f in the yellow highlighted cells) . As there is a chance that as projected, a buyer who may be willing to purchase the occur, will account for this risk by using a required rate would the potential buyer be willing to pay based upon t the future projected free cash flows?
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ons een cash generated from ur company's fiscal or calendar f determining a company's value h flows calculated for your is Excel workbook. Use 5% as tal PV if your selected ion 1 were reduced by 10%?
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
write your written analysis. s for the next three (3) years ear's free cash flows from flows by 3% (will self-populate t these increases may not occur e company before the increases of return of 7%. What price the known free cash flows and
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
PART I: STOCK VALUATION Read the explanations to the right of the calculation cells for specific information on the data. Question 1: Initial Stock Valuation Year Cash Div/Share ($) Dividend Yield Stock Price 2021 $ 3.20 1% $ 1,437 $ 256.15 731000 2022 $ 4.20 2% $ (4,816) $ 200.03 670000 2023 $ 4.40 2% $ (14,254) $ 207.84 601000 Question 2. Stock Valuation—The New Dividend Yield if the Company Increased Its Dividend Per Share by 1.75 Use the numbers from Question 1 as your basis to calculate these questions. Year Dividend Yield Stock Price 2021 $ 4.95 1.93% 1,437 $ 256.15 731000 2022 $ 5.95 2.97% -4,816 $ 200.03 670000 2023 $ 6.15 2.96% -14,254 $ 207.84 601000 Question 3. The Dividend Yield, Cash Dividend Per Share, Stock Price, and Total Shares Outstanding After the St Use the numbers from Question 1 to calculate these questions. Year Dividend Yield Stock Price Milestone Two: Stock Valuation and Bond Issuance ( fill in the YELLOW cells ) Stockholder's Equity (in millions) Total Shares Outstanding (millions of shares) Cash Div/Share ($) +1.75 Stockholder's Equity (in millions) Total Shares Outstanding (millions of shares) Cash Div/Share ($) Stockholder's Equity (in millions) Total Shares Outstanding (millions of shares)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
2021 $ 1.600 1.25% 1,437 $ 128.08 1,462,000 2022 $ 2.100 2.10% -4,816 $ 100.02 1,340,000 2023 $ 2.20 2.12% -14,254 $ 103.92 1,202,000 Question 4. The Rate of Return on Investment Based on the Cash Div/Share ($) and Stock Price You Used in Quest Use the numbers from Question 1 to calculate these questions. Year Stock Price 2021 $ 4.95 $ 256.15 CALCULATE ROI 2022 $ 5.95 $ 200.03 -19.59% ROI cell is formulated 2023 $ 6.15 $ 207.84 6.98% ROI cell is formulated PART II: BOND ISSUANCE Newly issued 10-year bond. Calculate the present value in the four scenarios below. 1. The present value of the bond at issuance Present Value PV ($3,000.00) Periods N 20Number of semi-annual payments made over 10 years Cash Div/Share ($) Return on Investment
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Interest I 2.50%Annual interest rate at issuance paid semi-annually (Annu Payments PMT $ 7,500 This bond makes regular semi-annual payments of interes Future Value FV $ 300,000 Future value in 10 years—enter as a positive number (Al 2. The present value of the bond if overall rates in the market increased by 2% annually Present Value PV ($2,142.86) Periods N 20Number of semi-annual payments made over 10 years Interest I 3.50%New annual market interest rate paid semi-annually (New Payments PMT $ 7,500 This bond makes regular semi-annual payments of interes Future Value FV $ 300,000 Future value in 10 years—enter as a positive number (Alw 3. The present value of the bond if overall rates in the market decreased by 2% annually Present Value PV ($5,000.00) Periods N 20Number of semi-annual payments made over 10 years Interest I 1.50%New annual market interest rate paid semi-annually (New Payments PMT $ 7,500 This bond makes regular semi-annual payments of interes Future Value FV $ 300,000 Future value in 10 years—enter as a positive number ( Al
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
4. The present value of the bond if overall rates in the market remained the same as at issuance Present Value PV ($3,000.00) Periods N 20Number of semi-annual payments made over 10 years Interest I 2.50%Annual market interest rate remains the same as Question Payments PMT $ 7,500 This bond makes regular semi-annual payments of interes Future Value FV $ 300,000 Future value in 10 years—enter as a positive number (Alw
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
tock Split Occurs
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
tion 1 (10 X 2)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ual Interest Rate / 2) st (in dollars). Annual Interest Payment / 2). lways the Future or Face Value of the Bond) (10 X 2) w Annual Rate divided by 2) st (in dollars) (Dollars Paid Annually divided by 2) ways the Future or Face Value of the Bond and Never Changes) (10 X 2) w Annual Rate divided by 2) st (in dollars) (Dollars Paid Annually divided by 2 and Never Chang lways the Future or Face Value of the Bond and Never Changes)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
(10 X 2) n 1, paid semi-annually (Annual Rate divided by 2) st (in dollars) (Dollars Paid Annually divided by 2 and Never Chang ways the Future or Face Value of the Bond and Never Changes)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Instructions and Explanations PART I: STOCK VALUATION Note: Use and enter the fiscal or year-end financial data that you calculated or found for your selected company and enter the appropriate data into each yellow highlighted cell. Note: Stock price for your selected company is found in your selected company's spreadsheet. Stockholder's Equity = Assets - Liabilities. This represents the ownership of a corporations. Owners are called "stockholders" because they hold stocks or shares of the company. The main goal of every corporate manager is to generate shareholder value. T his number will be found on your selected company's final project Excel workbook spreadsheet.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
PART II: BOND ISSUANCE Return on Investment (ROI) : Using the formula: ROI = ((Dividend ) + (New Price - Old Price) / Old Price)) Bonds are a long-term debt for corporations. By buying a bond, the bond-purchaser lends money to the corporation. The borrower promises to pay a specified interest rate during the bond's lifetime and at maturity, payback the entire future value of the bond. In case of bankruptcy, bondholders have priority over stockholders for any payment distributions. For purposes of this exercise, certain assumptions are being made. Assume that your selected company issued a new 10-year bond for $300,000 on October 1, 2021, that will mature on October 1, 2031. The future value of this bond is therefore $300,000. The bond was issued at the current market rate of 5.0% fixed for 10 years, with interest payments made semi-annually. What is the present value of this bond using the three scenarios in Part II: Bond Issuance?
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Bonds = Debt .................... Bondholders = Lenders Once you have completed these calculations, proceed to write your written analysis. ges) NOTE: A simple rule to follow: When market rates change, nothing in the original bond's terms change, except you will enter the new market interest rate in place of the interest rate stated at the bond's issuance date. In other words, the future value remains the same, payments remain the same, periods remain the same. When you change the interest rate to reflect the new market rate, the present value of the bond will either increase or decrease. For the purposes of this exercise, assume that the new market rates occur one (1) day after the initial bond is issued. To calculate PV, you can use the Excel formula or the financial calculator provided. Link is provided below. https://www.arachnoid.com/finance
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ges)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
WACC 5% Initial Outlay CF1 CF2 CF3 CF4 ($17,000,000) Cash Flows (Sales) $ 4,390,000 $ 4,200,000 $ 4,500,000 $ 5,000,000 - Operating Costs (excluding Depreciation) $ 700,000 $ 700,000 $ 225,000 $ 350,000 - Depreciation Rate of 20% (5-Years) $ (3,400,000) $ (3,400,000) $ (3,400,000) $ (3,400,000) Operating Income (EBIT) $ 290,000 $ 100,000 $ 875,000 $ 1,250,000 - Income Tax (use 20%) $ 58,000 $ 20,000 $ 175,000 $ 250,000 After-Tax EBIT $ 232,000 $ 80,000 $ 700,000 $ 1,000,000 + Depreciation $ 3,400,000 $ 3,400,000 $ 3,400,000 $ 3,400,000 Cash Flows ($17,000,000) $ 3,632,000 $ 3,480,000 $ 4,100,000 $ 4,400,000 NPV $5,263 ACCEPT IRR 5.0% ACCEPT Milestone Three: Capital Budgeting Data (fill in YELLOW cells) Select from drop- down:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Instructions and Explanations considering a potential capital investment for new equipment. CF5 1. Capital Budgeting Example Setup 2. Capital Budgeting Example Setup $ 4,700,000 Initial investment $17,000,000 Initial investment $65,000,000 $ 400,000 Straight-line depreciation of 20% Straight-line depreciation of 20% $ (3,400,000) Income tax rate = 20% Income tax rate = 20% $ 900,000 WACC: use 5% WACC: use 9% $ 180,000 Cash Flows (sales revenue based upon this Cash Flows (sales revenue based upon this $ 720,000 purchase of new equipment, are projected purchase of new equipment, are projected $ 3,400,000 to be as follows): to be as follows): $ 4,120,000 CF1: $4,390,000 CF1: $15,000,000 CF2: $4,200,000 CF2: $17,000,000 CF3: $4,500,000 CF3: $18,000,000 CF4: $5,000,000 CF4: $19,000,000 CF5: $4,700,000 CF5: $18,000,000 Operating Costs Operating Costs CF1: $700,000 CF1: $500,000 CF2: $700,000 CF2: $500,000 CF3: $225,000 CF3: $600,000 CF4: $350,000 CF4: $500,000 CF5: $400,000 CF5: $500,000 For this milestone, you will assume that your selected company is Choose one of the three investment options listed below and solve. You will either ACC Initial Investment—always negative. Companies have to invest money ("payout" funds) in order to gain the future benefit.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Once you have completed these calculations, proceed to write your written analysis. WACC—why do we use WACC rate for new projects? If the project's IRR doesn’t earn a return equal to or higher than WACC, the corporation should abandon the project and invest money elsewhere.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
3. Capital Budgeting Example Setup Initial investment $85,000,000 Straight-line depreciation of 20% Income tax rate = 20% WACC: use 9% Cash Flows (sales revenue based upon this purchase of new equipment, are projected to be as follows): CF1: $50,000,000 CF2: $45,000,000 CF3: $35,000,000 CF4: $40,000,000 CF5: $35,000,000 Operating Costs CF1: $15,000,000 CF2: $12,000,000 CF3: $11,000,000 CF4: $13,000,000 CF5: $13,000,000 CEPT or REJECT the proposal.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
1. Original Scenario From Milestone 1—Time Value of Money Using 8% Current Market Interest Rate at 8% Interest Rate 8.00% Years 2021 2022 2023 Amounts* $ 9,078.00 $ 8,260.00 $ 6,760.00 Pv* $ (8,405.56) $ (7,081.62) $ (5,366.31) Total Pv* $ (20,853.48) *In millions 2. Change in Interest Rate and Its Implications Lower Current Market Interest Rate to 4% Interest Rate 4.00% Years 2021 2022 2023 Amounts* $ 9,078.00 $ 8,260.00 $ 6,760.00 Pv* $ (8,728.85) $ (7,636.83) $ (6,009.62) Milestone Four: Interest Rate Implication (fill in YELLOW cells)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Total Pv* $ (22,375.30) *In millions 3. Change in Interest Rate and Its Implications 3. Increase Current market Interest Rate to 12% Interest Rate 12.00% Years 2021 2022 2023 Amounts* $ 9,078.00 $ 8,260.00 $ 6,760.00 Pv* $ (8,105.36) $ (6,584.82) $ (4,811.63) Total Pv* $ (19,501.81) *In millions
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Instructions and Explanations We will use your selected company's free cash flows for Milestone Four analysis. (Note that the initial interest rate and rate changes for this Milestone are different than those use Three scenarios will be analyzed: 1. Current Market Interest Rate at 8% 2. Lower Current Market Interest Rate to 4% 3. Increase Current market Interest Rate to 12% Once you have completed these calculations, proceed to write your written analysis.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ed in Milestone One.)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
ACCEPT REJECT
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help