ACCG6003 Managing Finance| Price Multiple Model

This is an induvial assignment required for each student. Students are required to keep expanding their analyses in the unit preparation and provide a comprehensive analysis on the selected company. This term report is expected to be about 15-20 pages long.
In principle, students are expected analyse the same company they selected in the unit preparation. Nevertheless, students can consult with the lecturer if they wish to discuss the possibilities of analysing a different company for the term report.
The term report should include the following sections:
1. Introduction
• Provide a clear statement of objectives and an outline of the structure of the report.
2. Environment, Industry and Strategy Analyses
• Describe the core business of this company.
• Discuss the industrial environment in which this company operates.
• Discuss the competitiveness of this company and challenge it faces.
• Summarize the financial ratio analyses you performed in unit preparation report and comment on the company’s condition.
3. Accounting Analysis
• Identify the company’s one key accounting policy.
• Discuss how this accounting policy relates to the company’s business operation
• Identify areas that require the use of management judgment when applying this accounting policy and provide explanations.
• Comment on the appropriateness of the application of this accounting policy.
4. Capital Structure and Payout Policy Analysis
• Discuss type and amount of the financial securities this firm issued for financing (e.g. common shares, preference shares, corporate bond, bank loan, etc.)
• Discuss amount and form of the pay out this company made (e.g. cash dividend and share repurchase).
• Comment on the appropriateness of the company’s capital structure and payout policies.
5. Equity Valuation
• Perform equity valuation using Discounted Cash Flow Model
• Perform equity valuation using Abnormal Earnings Model
• Perform equity valuation using Price Multiple Model
• Perform sensitivity tests and comment on the robustness of your valuations
• Compare your valuation with the current market share price and make recommendation
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