Finance Research Project

USE THE COMPANY VERIZON COMMUNICATIONS

see attached assignment instructions 

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—Background and Industry (one short paragraph). 

-2- The financial leverage ratios (10% of the project grade)

a) Find the financial leverage ratios for THE COMPANY assigned for you of the project for the last 3-5 years in the Internet. Present these ratios as the table(s) in your project.

  • Debt-to-assets ratio (Debt ratio)
  • Debt-to Equity ratio
  • Interest Coverage ratio (the Times Interest Earned)

b) Write (about) 1 page of the analysis of the ratio results. In your analysis you should answer the following questions. Please explain your answer to each question.

How is THE COMPANY financing its assets? Discuss how much risk is associated with the bonds issued by the company? How can this risk be measured? Please explain.

-3- Collect and evaluate the data about bond performance of the assigned company. (15% of the project grade).

The information on bonds can be found on the website http://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.

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.

Copy the quotations of two bonds issued by THE COMPANY (SELECTED BY INSTRUCTOR) that contain the Price. Present these quotations in your project.

  1. Assume that par value of the bond is $1,000. What were the last prices of the bonds in $$$ (listed in the Price column)? Show your work in your project.
  2. Assume that par value of the bond is $1,000. Calculate the annual coupon interest payments. Show your work in your project.
  3. Assume that par value of the bond is $1,000. Calculate the current yield of the bonds. Show your work in your project.
  4. 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. How much is the YTM listed in quotations is for the bonds? Explain the meaning of YTM?
    2. If you are going to buy a bond issued by THE COMPANY, which bond would you choose? Why?
    3. Are these bonds callable? If the bonds that you chose are callable (non-callable), will it change your decision to buy them?
    4. If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose? Take a look at the balance sheet and income statement of the company. What data or ratios support your decision to buy this bond or not? You may want to incorporate the results of the Research Project Part 1, as well as the results of the financial leverage ratios to answer this question. You should develop a specific recommendation, with supporting rationale to explain your answer.

-4- Collect and evaluate the data about stock performance of the assigned company for the last one year. (totally 35% of the project grade).

1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. (10% of the project grade)

  1. Present the market ratios as the table(s) in your project.
  2. Write about 1 page of analysis of the market ratio results that you found. Compare the market ratio results against the industry or main competitor. In your report please answer the question: Are the common stockholders receiving an adequate return on their investment?
  3. Compare the P/E ratio of your company with the industry average or 5-year average. Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

-2) Analysis of the historical stock prices trend for the last year. (10% of the project grade)

  1. Collect and evaluate the data about stock prices of the assigned company for the last one year for the company and its major competitor.
  2. Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.
  3. Write about 0.5 page of analysis the historic stock prices trend for the last year.

3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project. (15% of the project grade)

1. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate, beta, and the market return.

a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets – U.S. Treasury Bonds Rates.  You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Discuss how appropriate this rate is as a measure of risk.

b) Between 1926 and 2017, the compound annual rate of return of S&P 500 is estimated a 10%. We will use this number as the market return. Discuss how appropriate this rate is as a measure of return.

c) Beta is listed in www.finance.yahoo.com under Trading Information – Stock Price History, as well as on the company’s front page. What is the beta listed for the company? What does it mean?

d)  Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line. Please show your work.

2. There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the dividend Payout Ratio on www.finance.yahoo.com under Statistics.

Calculate the company’s sustainable growth rate. Please show your work.

3. Apply the Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock. Please show your work.

Please note that for some companies it is not possible to use the Gordon model. If that is the case, please explain why it is not possible to use this model for your company. What other models is it possible to use?

4. Compare the result of your calculations with the current stock price. Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Why? Please explain your answer.

5- Develop a specific recommendation, with supporting rationale for your client, as to whether the assigned company’s recent trend in financial and stock performance is of sufficient financial strength to warrant entering in a long-term investment in bonds and/or stocks of the company. Explain your answer (about 1 page) (10% of the project grade).

-6- Develop a specific recommendation, with supporting rationale for the COMPANY’S management – Think about the financial strategy of the company, how to best balance THE COMPANY’S financial leverage to optimize shareholder wealth going forward taking into consideration the company’s current market position, credit rating, dividend policy, etc.  (10% of the project grade).

-7- Reflection – the students should write a paragraph in their own words reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace. (5% of the project grade).

PRESENTATION OF PAPER AND WRITING (15%) of the project grade):

-Organization, Format and Presentation of Paper including the Title page, Introduction, Body, and Summary. Each section of the paper must begin with a sub-heading. Please use the sub-headings included in the assignment (4% of the project grade)

Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3% of the project grade)

Logical and Smooth Flowing Transitions and Relationships among Sections of the Written Report (3% of the project grade)

Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Mules
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Psychology
Thank you. I will forward critique once I receive it.
Customer 452467, July 25th, 2020
Political science
Thank you!
Customer 452701, February 12th, 2023
Business Studies
Great paper thanks!
Customer 452543, January 23rd, 2023
Education
Thank you so much, Reaserch writer. you are so helpfull. I appreciate all the hard works. See you.
Customer 452701, February 12th, 2023
Accounting
Thank you for your help. I made a few minor adjustments to the paper but overall it was good.
Customer 452591, November 11th, 2021
Psychology
I requested a revision and it was returned in less than 24 hours. Great job!
Customer 452467, November 15th, 2020
Technology
Thank you for your work
Customer 452551, October 22nd, 2021
Political science
I like the way it is organized, summarizes the main point, and compare the two articles. Thank you!
Customer 452701, February 12th, 2023
Finance
Thank you very much!! I should definitely pass my class now. I appreciate you!!
Customer 452591, June 18th, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat
Show more
<