Find the capital structure of your firm

Assignment Help Corporate Finance
Reference no: EM13204993

  1. Find the monthly closing stock prices (in Canadian dollars) for your company for the five years ending December 31 of last year.
    1. Type the symbol for your company (see above) followed by to in the space by "get quotes" and then click on "get quotes".
    2. In the menu on the left choose "historical prices". Then set the start date as January 1, of 4 years ago and the end date as December 31, of last year. Choose monthly for the frequency. Click on "Get Prices" and you will get the monthly stock prices for the last 5 years.
    3. On the bottom of the page you can click "Download To Spreadsheet" to get the prices put into an excel file. You will get 7 columns of data: Date, Open, High, Low, Close, Volume, and Adjusted Close (these are adjusted for splits and dividends). You will need the date and the adjusted close only for your calculations, so that is all that should eventually be submitted. You will also need the actual closing price for the end of last year (the last entry in the Close column).
  2. Find the quarterly dividends (in Canadian dollars) for your company for the five years ending December 31 of last year. Using the same site as above, choose "dividends only" as your frequency, but remember to change the start date to one year earlier. Download these data to a spreadsheet as well. The dividends should also include any stock splits or stock dividends. Here you will get two columns: Date and Dividend.
  3. Find the monthly closing prices for the S&P-TSX Composite Index for the same period as your stock prices. You will also find this on the Yahoo finance site, using ^GSPTSE as your entry for "Get Quotes". Follow the same procedure as with your stock prices. Here you will be able to use either the Close or the Adjusted Close prices as they are both the same.
  4. You will need to get interest rates from the end of last year for a 3-month Canada Treasury Bill and a 7-year Government of Canada Bond.
    1. You will find these at www.bankofcanada.ca.
    2. From the dropdown menu under "Rates and Statistics", choose "Interest Rates". Choose "Treasury Bills" and go down to 3-month Treasury Bills and then click on "Previous Data". You want to find the 3-month bill for December 31 of last year (daily value).
    3. Now go back and choose "Canadian Bonds". Scroll down to "Gov't of Canada benchmark bond yields: 7 year and click on "Previous data". You again want the daily value for December 31 of last year for 7-year bonds.
  5. Find the capital structure of your firm at the end of last year (this could be the company's fiscal year end). You will need to find the book value of long-term debt (the value on the balance sheet) and the market value of equity (number of common shares outstanding times the market price). You can find this information on the Toronto Stock Exchange site used to find your company or from the company's annual report (found on the company's web site or through www.sedar.com). You will probably have to look at the footnotes to find the number of shares outstanding. You have already collected the year end market price (here's where you need to use the actual price and not the adjusted price).
  6. Finally, you will need to find the company's long-term debt rating. A good site to check is www.fitchibca.com. Under "Corporate Finance" select "Corporates" and then "Issuer List" for an alphabetical listing or under "Financial Institutions" select "Banks" or "Insurance" and then "Issuer List".

Reference no: EM13204993

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