You are required to select a non-financial UK listed company (I have selected Royal Mail ) and either evaluate it or appraise the valuation given to it by a third party (e.g. acquirer). You are expected to demonstrate deep understanding and critical discussion of corporate valuation.
· This assignment contributes 50% to the module final mark.
· This assignment is designed to partially test the following learning outcomes:
· Understand the step-by-step guide for analysing and valuing a company in practice, including technical details for properly measuring and interpreting the drivers of value (LO2)
· Appreciate the limitations and usefulness of different models that can be used to analyse and value a company (LO3).
· The valuation of the firm MUST cover ALL the following steps:
§ Reorganise the financial statements and analyse historical performance.
§ Forecast financials and cash flows.
§ Compute the cost of capital (i.e., cost of equity and cost of debt).
§ Estimate a continuing value.
§ Convert enterprise value to equity value.
§ Calculate and interpret results.
· You cannot choose banks, insurance companies, and financial companies because their financial statements are significantly different from those of firms in other industries.
· In the appendix, you are required to show the relevant pages in the annual reports of the company you have analysed and include sources of other information you have used. This will not be included in the word limit.
· It is your responsibility to ensure that the financial statements of the selected company have sufficient information that enables you to conduct the analysis and write a comprehensive report. If sales revenues or cost of sales, for examples, are not available, you will not be able to conduct the forecasting step and, in turn, continue the steps of the analysis. Thus, you can change your company as long as it the new company is not selected by another student.
· You are required to write a report of 2,500 Your assignment will be marked as a complete report.
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