Estimate the current value of your corporation by forecasting the cash flows over five years using the provided Excel template, and explain your findings. Calculate EVA, NPV, IRR and MIRR.
Order Instructions
Overview
Corporate financial managers must have a business-wide perspective to successfully navigate the corporate environment. The skills you develop in this course will support you in your future business career as well as set the conceptual foundation for the future courses in your program. Your final project for FIN 330 will allow you to showcase your mastery of the varied skills a finance professional must obtain by requiring you to analyze a real-world corporation from a quantitative perspective while also investigating the challenges and decisions a manager must face.
In this milestone, you will continue to work on elements of Final Project I, the corporation valuation report.
Prompt
This milestone requires you to write a draft of the Capital Structure and Valuation sections (Sections III and IV) of Final Project I, the corporate valuation report. In this assignment, you will use the same corporation you focused on in Milestone One to expand upon the capital structure of the organization and the valuation of the corporation through forecasting.
Specifically, the following critical elements must be addressed in this milestone:
Capital Structure: In the third section of your report, discuss the capital structure of the corporation.
Outline the most recent year’s debt, equity, and total capital using the provided Excel template to show the overall capital structure of the corporation. Please note: to complete this, you will use the same template you used in support of Milestone One, but this time you will be completing the “Capital Structure” tab.
Articulate the corporation’s dividend policy and what impact it has on the investors.
Analyze the relationship between capital structure, cost of capital, and risk, using examples from your chosen organization.
Explain how the relationship between capital structure, cost of capital, and risk can help inform decision making and maximize corporate value.
Valuation: The final section of your report will focus on calculating current value, outlining assumptions, and estimating the future value of the corporation through forecasting the cash flows. Specifically, respond to the following:
Calculate the current market value of equity for your corporation, using the three-year history and provided Excel template, and explain what it means for the corporation. You will submit this template along with your report, and may embed pieces of the Excel template into your report to help support your work in this section. Please note: this is the same template you used in support of Milestone One, but this time you will be completing the “Valuation” tab.
Outline any assumptions you have made in calculating the current value and estimating the future value of the corporation, explaining why you made them and why they are important. (Hint: Assumptions can include growth rates, margins, trends, etc.)
Estimate the current value of your corporation by forecasting the cash flows over five years using the provided Excel template, and explain your findings. Calculate EVA, NPV, IRR and MIRR.
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