FINANCE 361 Two Degrees Mobile Limited assignment 代写
FINANCE 361 – Assignment 21.Deadline and SubmissionThe deadline for this assignment is 17 Oct 2017 at 23:55. Submission isvia CANVAS for the PDF document and the supporting Excelcalculations. You should submit the Excel spreadsheet to Assignment 2Valuation spreadsheet and the PDF document to Assignment 2 -Valuation document (which is linked to Turnitin).2.ContextSince joining Megabank Asset Management three months ago you havebeen busy learning the ropes. You are about to grab dinner at 7pmwhen your line manager, Charles de Vitry, sends you an email,reproduced below:From: Charles de Vitry : Global Investments <firstname.lastname@example.org>To: Sally Baum : Global Investments <email@example.com>Subject: Valuation of Bunnings Limited for tomorrow at 10amHi SallyI’ve just been told by Peter from the Investment Committee that we have beenapproached to bid on the equity of Two Degrees Mobile Limited (Two Degrees). Tostart the process we are expected to submit an Expression of Interest form, inwhich we have to indicate the price we would be happy to pay. Although this ispurely indicative and not a legally binding commitment, it is considered bad formto back out of an expression of interest. The Investment Committee will be meetingtomorrow at 10am to discuss our Two Degrees valuation; they will be expecting meto have an opinion about the value of Two Degrees. So I need your help: Can yourun some numbers and come up with an equity valuation for Two Degrees as awhole? I’ll need a 3-page summary (in pdf format please). I’d like a brief overviewof Two Degrees, a description and motivation of your valuation approach, key1assumptions and valuation drivers, the actual base case valuation (of the equity ofthe whole firm) and some scenario analysis showing what the valuation might looklike if we change the key valuation drivers. I’ll be presenting this to the committeeso make sure it looks professional. You should be able to locate financials for TwoDegrees at their website . You can use any information that is publicly available. Be1sure to send me your Excel calculations just in case I get challenged on any of thenumbers.I’ll be boarding my plane in 15 mins and should be back in town tomorrow morning by9:15am. It would be great if you could email me the overview before then so I can havea look at it while taking the taxi to the meeting.Thanks, Charles3.RequiredIf anything is unclear, do feel free to raise it in class. To be fair to otherstudents, I won’t be providing clari cation on an individual basis or viaemail (other than in exceptional cases).Please write up a document as requested by Charles de Vitry above.The document should be in pdf format, and should be limited to 3pages (including charts and graphics, excluding referencing). You caninclude charts and graphics if you feel that helps you communicatemore clearly. You can use any information that is publicly available.You will need to submit your calculations (ie Excel spreadsheet), somake sure it is structured in a way that is easy to follow.NOTE: This assignment may provide less structure and guidance thanyou are used to. This is intentional: guring out what you need to do ispart of the assignment! It helps to imagine yourself as the customer:what would you like to see if you were Charles de Vitry?See https://www.companiesoffice.govt.nz/companies/app/ui/pages/companies/1117222/docum1The last of the reports have been downloaded for you as examples(can be found on CANVAS under Assignment 2)24.GradingI will roughly allocate grades according to the breakdown below.However, you will only receive an overall grade.•Overall presentation – 20%, Overview – 10%•Motivation of valuation approach – 20%•Key assumptions and valuation drivers – 10%•Valuation and scenario analysis – 30%•Others (presentation of Excel spreadsheet, referencing etc.) – 10%35.Helpful Hints 1: One way to approach the valuation of acompany•You should already know how to do the calculations for avaluation that is what the second part of this course is all about.So what follows is really a bit of a guide about the rest of theprocess…•Stage 1: Find the key documents and information so youunderstand the business you are valuing and the industry itoperates in (and the country or countries, if you are not familiarwith it/them)Financials (aka Annual Reports, Interim Reports)C o m p a n y w e b s i t eWikipedia entryRegulatory lingsNews reports (google, factiva, reuters, bloomberg)Same for other rms that are comparable•Stage 2: The businessWhat types of business does the company do? How does itmake money? Who are its customers, its suppliers, itsemployees, its regulators?How is the company funded? Who owns the equity in the rm?Is it listed? Does it have any debt? Bonds, shareholder loansor bank loans? What are the terms – interest rate, maturity?What are the drivers of growth, market share and protability?Who are its competitors?Key risks and opportunities•Stage 3: The valuation approach4What is the appropriate valuation approach for the company?Refer back to notes and readings for guidance.Sketch out a mindmap of the valuation. Start with the basics- cash ows and discount rates – then work out backwardswhat you need in order to calculate each component untilyou arrive at underlying inputs or assumptions.•Stage 4: The modelBuild the model in Excel. (This is where most inexperiencedpeople start… )Build in checks and balancesDo a reality check – try a few quick and dirty calculations.Based on your valuation, what is the implied growth rate?What is the P/E ratio? Does it make sense? How does it stackup against competitors?Conduct sensitivity analysis on the important model inputs.Conduct scenario analysis for key uncertainties.∗ Sensitivity analysis: Example: If beta increases by 1%,then the value of equity increases by ?%∗ Scenario analysis: Value of equity given growth of (0%, 1%,…, 10%) [Often best represented graphically or in atable]• Stage 5: Presenting the valuationPresentation should address the following pointsThe valuation midpoint and range. (Any reader should be ableto nd this in under 2 seconds after picking up the document.)∗ Include valuation target name, valuation date and valuercontact details (that’s you!)Why are you doing the valuation, what will it be used for,who is using it?Firm and industry overview
FINANCE 361 Two Degrees Mobile Limited assignment 代写5Description and motivation of the chosen valuation approach.What approach did you take and why did you decide on it.(Motivate the decisions you made re valuation approach) Keyinputs and assumptions.Overview of the valuation calculation. Often best presentedin a table format.Sensitivity analysis and scenario analysis. (Graphs can beuseful here.)Disclaimer. (Not needed for assignments, but in the realworld you’ll need one. Talk to the people in your legaldepartment, or ask a lawyer for help.)Proofread the document for spelling mistakes andgrammatical errors. Ensure the presentation looksprofessional. (Muted and few colours, clear headings – searchfor investment bank research notes to see how others do it.)• In real life you do not always progress smoothly from one stage tothe next; often there is a bit of moving back and forth as you runinto problems or discover new information.6.FAQQ1: We are getting one mark instead of two marks for assignment 2,does that mean the Excel model is not going to be marked?For assignment 2 you will receive an overall grade rather than twoseparate grades for the Excel model and the pdf written document. Wewill be looking at both les, and both parts count towards the overallgrade.Q2: What is the purpose of the EXCEL spreadsheet?Your Excel model should contain the supporting calculation of yourvaluation. Both the Excel le and the pdf written document should beclearly constructed and professionally formatted so that they are easyto follow. Also, be sure to address the speci c requirements listed in the6assignment instruction (company/industry overview, sensitivity andscenario analysis, etc.).Q3: Can I use an existing excel template?We recommend that you start fresh and build a model according to yourmodel description for assignment 2. However, feel free to look at othervaluation model spreadsheets as examples. You can also refer to theassignment 1 Excel template as an example of a well-constructed andpresented Excel model.Q4: What is the purpose of the written document?Your written document should include a description of the valuationmodel (what approach did you take, and why did you decide to use thatparticular approach). It is also important to state the key results ofyour valuation in the document. The reader should be able tounderstand the valuation approach that you have chosen and the keyvaluation results before looking at the Excel le. Also, remember tostate clearly the assumptions made in the valuation.For the assignment, you should use a valuation approach that isappropriate and logical for the target company. In the assignment, youwill be assessed on how well you can explain and motivate theapproach chosen, and how well the valuation was carried out.Q5: Can I use estimates retrieved from external sources instead ofcalculating my own for the assignment?You can use any publicly available information for assignment 2,including research results and estimations produced by others.However, you should provide a short description of how the authorsderived the gures and justify why this is suitable to use given yourchosen valuation approach.If you are using external materials and data, you should also cite thesource in your report and/or Excel model. A suggested referencing styleis the APA convention (for more details – http://www.library.auckland.ac.nz/ subject-guides/bus/topicguides/apa_for_business.htm )7
FINANCE 361 Two Degrees Mobile Limited assignment 代写
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