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INSTRUCTIONS:
● This is an individual assessment.
● This is an Analystical Report examining strategies for equity and fixed-income valuation, and investment portfolio management.
● To complete this report, you need to use TWO Case studies (see 3 Questions in Section A and 3 Questions in Section B) and ONE Portfolio simulation (see 3 Questions in Section C).
● You are required to answer ALL questions of the THREE Sections above. These sections must be included in the Body section of your Main report.
● The well structured report is required (please refer to Types of assessments athttps://ltl.lincoln.ac.nz/learning-and- research-skills/writing-and-referencing/types-of-assessments/, and look for Reports).
● Please use the template of the report structure provided in the next page.
● Marks allocated to each question are indicated.
● Please do NOT share your answers to the questions with others.
● The final report contributes to a maximum of 40% of the final grade.
● Please present all final answers with two decimals for number (e.g. 1.23) and two decimals for percent (e.g. 1.23%).
● FULL working must be presented (with formulas, working steps, and results) .
● You are welcome to use a financial calculator and/or Excel to do some of the questions.
● All tables, figures, and screenshots (if any) should be neatly presented with clear headings.
● Please place All Tables and Figures used next to the corresponding discussions in the report.
● Make sure that all final answers are clearly indicated and easy to identify for marking.
● Do NOT copy the questions to your assignment.
● There is NO requirement to submit a separate assessment coversheet.
● An electronic copy of your assignment file (saved as a .pdf) is to be submitted to theSubmission Drop-Box for FINAL REPORTon the course LEARN page (the link opens on 23 May 2024). Your name and student ID must be provided on the front page.
● Please refer to the Whakamārama Akomaka | Course Information block on LEARN for further information aboutthe AgriCom Style. Guide.
Please note that:
● Handwritten answers will not be marked.
● Your report must not exceed 40 pages.
● Every piece of work you hand in must meet the academic standards of Lincoln University. You should familiarise yourself with these, including the Academic Integrity Policy.
● Citations and references should be done as perthe APA 7th process.
Late Submission:
Unless alternative arrangements have been made with the Examiner, for assessment worth 10% or more of the final grade, MINIMUM penalties for lateness (based on calendar days) will be:
|
Less than 24 hours late (i.e., 1 day) |
10% late penalty |
|
Between 24 and 48 hours late (i.e., 2 days) |
20% late penalty |
|
Between 48 and 72 hours late (i.e., 3 days) |
30% late penalty |
|
Between 72 and 96 hours late (i.e., 4 days) |
40% late penalty |
|
Between 96 and 120 hours late (i.e., 5 days) |
50% late penalty |
|
Over 120 hours late (i.e., 5 days) |
100% late penalty |
Learning Outcomes (LO) covered:
LO1. Demonstrate a comprehensive understanding of the theories and characteristics associated with securities valuation
and investment portfolio management.
LO2. Compare and illustrate equity and fixed income valuation techniques for investment decisions.
LO3. Perform equity and fixed income security valuations for investment.
LO4. Apply the main methods of security analysis and portfolio management.
LO5. Create an investment portfolio and evaluate its performance in the light of recent research on financial investments.
Template of the report structure: Please do NOT include the Blue words in your report Preliminary sections (4 marks)
- Title page
- Acknowledgment
- Abstract
- Table of Contents
- List of Tables (if any)
- List of Figures (if any)
- List of Appendices (if any)
Main report sections (4 marks for structure + 90 marks for contents)
1. Introduction (5 marks)
2. Investment Analysis and Management (Body section)
2.1. Equity Valuation and Analysis
2.1.1. Instrinsic Value (8 marks)
2.1.2. Discussion on Valuation Approaches (8 marks)
2.1.3. Evaluation on the Equity Performance for Investment (9 marks)
2.2. Fixed-income Valuation and Analysis
2.2.1. Credit Worthiness Analysis (8 marks) 2.2.2. Bond Valuation and Analysis (8 marks)
2.2.3. Evaluation on Bond Performance for Investment (9 marks)
2.3. Evaluation of Portfolio Performance
2.3.1. Portfolio Construction (6 marks)
2.3.2. Portfolio Performance Analysis (8 marks)
2.3.3. Evaluation on Portfolio Performance (11 marks)
3. Conclusion (5 marks)
4. Recommendation (5 marks)
Supplementary sections (2 marks)
- Appendices (if any)
- References
Note:
- A maximum of 10 marks of this final report is allocated for a correct report structure :
o 4 marks for the Preliminary sections
o 4 marks for the Main report sections
o 2 marks for the Supplementary sections
- A maximum of 90 marks of this final report is allocated for the report contents:
o 5 marks for Introduction
o 75 marks for Investment Analysis and Management (25 marks for each sub-section)
o 5 marks for Conclusion
o 5 marks for Recommendation
- Students are required to write the Introduction, Conclusion, and Recommendation (Sections 1, 3, and 4 in the Main report sections) based on their answers in Section 2: Investment Analysis and Management (Body section).
SECTION A: EQUITY VALUATION AND ANALYSIS
LOs 1, 2, and 3 are assessed in Section A. This section requires students demonstrate a comprehensive understanding of the theories and characteristics associated with equity valuation; perform equity valuation for investment; and compare and illustrate equity valuation techniques for investment decisions. There are three questions in this section. The total marks of this section is 25 marks.
QUESTIONS:
1. Use the information from Box 1 on pages 4 and 5 of Equity Analysis and Valuation for The Walt Disney
Company (Disney) and assume the current year is 2019, calculate the intrinsic value of Disney stock using:
a. Multi-Stage Growth Model (5 marks)
b. Market Multiples Approach (5 marks)
2. Based on the results calculated above:
a. Reconcile Disney stock’s intrinsic value and identify whether the stock was undervalued or
overvalued. (4 marks)
b. Recommend the most suitable valuation approach by discussing the advantages and disadvantages of each valuation approach. (6 marks)
3. Based on the Bloomberg screenshots in Figures 1-2 on page 6, evaluate how the performance of Disney stock changed relative to the S&P 500 market index over the period 01/08/2019 – 01/08/2021 to explain why or why not you would like to invest in the Disney stock. (5 marks)
Note: You can use more information from Yahoo Finance to support your analysis at https://finance.yahoo.com/quote/DIS/history?p=DIS.
(Show ALL workings if any)
Box 1. Equity Analysis and Valuation for The Walt Disney Company
Figure 1. Disney Stock (DIS US Equity) and S&P 500 Market Index (SPX Index) 01/08/2019 - 01/08/2021
Figure 2. Beta Statistics between Disney Stock and the S&P 500 Market Index 01/08/2019 - 01/08/2021
SECTION B: FIXED-INCOME VALUATION AND ANALYSIS
LOs 1, 3, and 4 are assessed in Section B. This section requires students demonstrate a comprehensive
understanding of the theories and characteristics associated with fixed-income valuation; perform fixed-income valuation for investment; and apply the main methods of security analysis for investment decisions. There are
three questions in this section. The total marks of this section is 25 marks. QUESTIONS:
4. Use Table 1 on page 8, analyse the relative credit worthiness of Disney and its peers. Your discussions should cover the following:
a. How to evaluate a company’scredit worthiness (2 marks)
b. Analyse the relative credit worthiness of Disney and its peers based on:
- Debt-to-Assets measure (2 marks)
- Coverage Ratio measure (2 marks)
- Debt-to-EBIDTA measure (2 marks)
5. Consider a Disney bond that matures in 13 years, pays 7.0% coupon semi-annually, with a current price quote of 148.026%.
a. Calculate the yield-to-maturity on the Disney bond using bond quote approach. (4 marks) b. Based on the Bloomberg screenshot in Figure 3 on page 8, explain the difference between your result in Question 5a and the yield on the bond shown in Figure 3. (4 marks)
- 经济Economics
- 金融Finance
- 会计Accounting
- 工商管理Business Management
- 计算机computer science
- 商业分析business analysis
- 法律Law
- 管理Management
- 市场营销Marketing
- 哲学Philosophy
- 心理学Psychology
- 物理Physical
- 统计学statistics
- 电气工程electric engineering
- 化学chemistry
- 生物biology
- 数学mathematics
- 语言学linguistics
- 土木工程civil engineering
- 工程力学engineering mechanics
- 艺术art
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