Reference no: EM132582517

FIN 402 Corporate Finance - City University College of Ajman

Assignment - Raising Capital and Valuation of Corporate Securities

Learning Outcome 1: Describe the process for the issuance of corporate securities and capitalization.

Learning Outcome 2: Apply the present value concept in valuing common stocks and bonds.

INSTRUCTIONS

(1) Select a listed company of your choice, which has a stock and a bond issue. The company should be publicly traded and have at least one year of trading history and one set of annual financial statements. The company can be listed in any stock market of the world (preferably the NYSE).

(2) Introduction: Write an introduction section which should include a brief description and history about how the company raised capital in the past. (200-400 words)

(3) Financing Strategy: Analyze the financing strategy used by the company to raise capital. Describe and evaluate the processes and procedures that can be used by the company to raise further capital.
(Find the debt to equity ratio, debt ratio, identify the various types of debt financing and equity financing. Comment on the par value, additional paid-in capital, authorized capital, treasury stock, retained earnings, etc)
(400-700 words)

(4) Bond Issue: Describe any one bond issue of the company and explain the characteristics of the same. (Items would include, the face value, maturity, coupon rate, whether fixed or floating, its yield to maturity and the current price at which it is selling in the market etc.)
Show the references to the data used. Make use of the charts and graphs available from the website with the appropriate referencing. (100-300 words)

(5) Bond Valuation: Perform valuation of the bond using present value techniques to find the intrinsic value of the bond and comment and interpret your results. State each of your assumptions clearly and make good use of appendices
(200-400 words)

(6) Stock Issue: Describe and explain the movement in stock prices over a five year period and compare the same with the stock market index. (use the P/E ratio, market to book value etc.).
Show the references to the data used. Make use of charts and graphs available from the website with the appropriate referencing. (100-300 words)

(7) Stock Valuation: Perform valuation of the shares of the company using the dividend discount model to find the intrinsic value of the share and comment and interpret your results. State each of your assumptions clearly and make good use of appendices
(200-400 words)

(8) Other important points:
• Prepare the report using table of contents, appropriate headings, and sub- headings as required.
• You are required to show all the data used in your work.
• Provide appropriate references to show the source of data used in your work.
• Attach the main financial statements of the company used in your work for at least two years.

Attachment:- Corporate Finance.rar