Explain how a firm should evaluate domestic investment

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Reference no: EM132150930

Note: The topics below refer to both real firms whose shares are traded on the London Stock exchange and to the Bellingdon_2018 mini-case which can be found on the module Studynet site under 'Module Units'.

Topic 1: Analysis of Company Accounts

Using appropriate financial ratios and the company's annual reports for the last five years, evaluate the financial performance of a) Dixons Carphone plc, or, b) 'Bellingham' (Task 1).

Topic 2: Investment Evaluation and International Aspects

2a Explain how a firm should evaluate domestic investment projects by evaluating the American Creations project from the Bellingham mini-case as an example. You need to complete Tasks 2 & 4 assuming a cost of capital of 14%.

2b Explain and evaluate the addition risks faced by firms when they undertake investment projects in foreign countries. Use the American Creations project from the Bellingham mini-case as an example.

Topic 3: Trade Finance
An important aspect of international trade concerns default or credit risk. Evaluate the options for managing credit risk

3a via the banking system, OR 3b via government sponsored schemes.

Topic 4: Estimating Capital Costs
Explain how to estimate the component capital costs and WACC for a) Dixons Carphone plc, OR, b) 'Bellingham' plc. Give an evaluation of the difficulties/problems encountered in arriving at your estimates.

Topic 5: Business Valuation
5a. Using appropriate alternative valuation models, estimate the equity value of a) Dixons Carphone plc, Compare your valuation of Dixons Carphone plc with the company's current market capitalisation and account for any difference. OR, b) 'American Creations' from the Bellingham mini-case.

Reference no: EM132150930

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