Reference no: EM133382425

Research Project Part - ROSS STORES INC., (ROST)

Due at the end of week 7.
This project is closely aligned with the Course Outcomes and Finance Program Objectives. Completion of this project can be used as part of a portfolio to show potential employers the student is skilled at performing company valuations and financial statement analysis and can be included on the student's resume.
Bond and Stock Performance Analysis

OBJECTIVE
In this part of the project you are to assume that your client plans to invest in bonds and (or) stocks issued by THE COMPANY (SELECTED BY INSTRUCTOR).

THE COMPANY for part 3 of the project can be the company that you were using for the Research Project Parts 1 and 2 or another company determined by your professor. THE COMPANY for this part of the project must have bonds listed on the website https://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.
Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include
• identification of the company by ticker symbol and name
• a reasonable and appropriate explanation of why you want to examine the alternative company
• the source of the analyst's report that will be used in the analysis (which must be submitted to me)
• acknowledgement by you that all the specific elements of the assignment (see below) will be prepared by you and included in the final research project report

YOUR SPECIFIC ASSIGNMENT
Using the information from the websites the student will develop evaluation of bond and stock performance for THE COMPANY (SELECTED BY INSTRUCTOR). (The evaluation portion will total 85% of the assignment grade)
-1-Introduction (5% of the project grade)- The paper should begin with a short introduction that explains the purpose of the paper and provides an overview of the contents that follow (one short paragraph).
-2- Collect and evaluate the data about bond performance of the assigned company. (30% of the project grade).
The information on bonds can be found on the website https://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Symbol, and click SHOW RESULTS.

Another useful website on bond information is https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.

1. Copy the bond information of two bonds issued by THE COMPANY (SELECTED BY INSTRUCTOR) that contain the Last Price. You can create a screenshot with the bond information and paste it in the project.

2. What were the last prices of the bonds (listed in the Last Sale column)? Assume that par value of the bond is $1,000. How much the investor will pay for the bond if he/she purchased the bond at the Price listed in the Last Sale column. Show your work in your project.

3. Assume that par value of the bond is $1,000. Calculate the annual coupon interest payments. Show your work in your project.

4. Assume that par value of the bond is $1,000. Calculate the current yield of the bonds. Show your work in your project.

5. How much is the YTM listed on the website of the bonds (in the Last Sale column - Yield)? (No calculations are required for this question).

6. Write a 1-2 page of the analysis of the bonds. In your analysis you should answer the following questions. Please explain your answer to each question.
1.
a. If you are going to buy a bond issued by THE COMPANY, which bond would you choose? Why?
b. Are these bonds callable? If the bonds that you chose are callable (non-callable), will it change your decision to buy them?
c. What is the bond's rating? What important information does this analysis provide?
d. If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose?
e. In Research Project Part 2 you analyzed debt/equity and financial leverage ratios. How do these ratios support your decision to buy these bonds or not?
-3- Collect and evaluate the data about stock performance of the assigned company for the last one year. (Totally 30% of the project grade).
a) Collect the market ratios for the company for the last 3 years and its major competitor for the last year. Present the market ratios as the table(s) in your project.
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o Price/Earnings ratio
o Price/Cash Flow ratio
o Price/Book ratio
o Price/Forward Earnings
o PEG ratio
o Dividends per share