A 3,000 word essay on an FTSE-100 firm from the years of 2016 to 2020. I have attached the template for the assignment as well as pasting it here:
Using the financial data of a FTSE-100 firm during the period from 2016 to 2020 and a variety of other resources (both written and electronic) critically answer the following questions in a 3,000 word report:
1. How has the firm’s capital structure strategy has evolved over the period? Critically assess whether there is any evidence that the debt/equity relationship is consistent with a particular view of capital structure, the rationale(s) for the approach undertaken, and whether or not there has been a discernible impact upon share price. To answer this question, you need to calculate relevant solvency ratios including debt-equity ratios, debt-assets ratios, and interest coverage ratios to evaluate how changes in the strategy has influenced the firm’s solvency and hence share price. (20 marks)
2. How has the dividend policy of the firm evolved over time? Critically justify the changes (if any) in the policy discuss their impact on the share price with reference to relevant academic literature and the dividend theories. (10 marks)
3. Using relevant models, estimate the firm’s weighted average cost of capital. Make relevant assumptions where necessary. Justify the estimated cost of capital with reference to your discussion in Question 1. What are the problems facing a company in determining its weighted average cost of capital and how are these issues addressed? (10 marks)
4. How well has the firm managed its working capital? To answer this question, you need to calculate relevant liquidity ratios (the current ratio, the acid-test ratio and the working capital ratio) to see how the firm’s liquidity position has evolved due to working capital management. (10 marks)
5. Has the firm increased its fixed assets through mergers and acquisitions? Critically evaluate the potential gains of one firm acquiring another firm. Support your answer with reference to the academic literature. (10 marks)
6. Critically evaluate the effectiveness of the firm’s operating decisions. To answer this question, you should compute relevant efficiency ratios (asset turnover ratio, inventory days, receivable days, payable days and cash operating cycle). (10 marks)
7. There are different methods which can be used to value a firm. Critically discuss if the dividend growth model is suitable to value the firm. How have the firm’s financing, investing and operating decisions contributed to its market value as reflected in the share price. (20 marks)
8. Presentation and referencing. (10 marks)
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