Evaluate the share price performance of the company

Reference no: EM132737476

BPF2213 Introduction to Finance - Muscat College

Measurement of Risk and Return, Valuation of securities, Cost of capital, Capital budgeting and Working capital

Part A:

You are working in a fund management company located in Muscat. In which, you are being asked to advise on potential equity investments. In this situation, you are asked to analyze the capital market standings of assigned MSM Listed Company and prepare a comprehensive report.
The required basic financial information will be given to you in the form of spreadsheet to do the required calculations. You are free to choose the overall structure and content of the report although ensure that your report includes the following requirements:

1. Briefly analyze the company's capital structure under the following headings:
a. Borrowings/Debts
b. Equity
c. Return on equity
d. Cost of Capital

2. Analyze the company's working capital (over the last five years).

3. Evaluate the share price performance of the company within the sector. Peer comparison should be done using data obtained from MSM or Yahoo finance or Bloomberg or Financial Times or other valid sources.

4. Comment on the overall performance of the company. Evaluate the prospects of the share price over the next twelve months. Clearly indicate the basis (justification) for your recommendation whether the share should be a ‘BUY', ‘HOLD' or ‘SELL'.

Part B:
1. Assume you are a project analyst for a TANFEEDH project in the Sultanate of Oman and you have been asked to analyze the project that has a stream of future cash flows. Briefly explain any TWO (2) capital budgeting techniques you would use for your analysis and recommendation.

2. Assume that there is a proposal to start new energy plant in Duqm. The project requires an investment of RO 160,000. The following are projected net annual cash inflows of the project.

Year	2021	2022	2023	2024	2025
Net Cash Flow (RO)	30,000	32,000	32,000	40,000	34,000

Required:

i. Calculate the Net Present Value of the project using an estimated/assumed expected rate of return. Show your workings.
ii. Make a recommendation to accept or reject the project.

Attachment:- Introduction to Finance.rar

Reference no: EM132737476

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