The company I am working with on this assignment is Qantas Airways Ltd.
For this assignment you will write a firm analysis report. The assignment will cover the topics: bond valuation, share valuation, capital structure policy, dividend policy and working capital management
1: Company Financials
Provide an overview of the company’s operations, financial situation, working capital management, and the major opportunities and challenges in the coming years. This is to understand how the company got to where it is today and what may occur in the future. You can find the company’s financial statements, for example, in DatAnalysis Premium, Yahoo Finance, or investing.com.
2: Bond Analysis
In this part of the assignment, you will analyse one of the firm’s outstanding bonds. Firstly, compute the yield on this bond. To simplify your calculations of the current required rate of return of the company’s bond, assume that the last coupon payment has just been made. Secondly, estimate the bond’s price one year from now (assuming that interest rates remain constant), and provide commentary.
3: Share Analysis
In this part of the assignment, you will analyse your company’s shares. Firstly, provide a graph and comment on the company’s stock price changes in the previous five years. Explain what factors have caused the stock price to develop as it did and link this investigation to your analysis in Task 1 of the assignment. Secondly, provide an overview of the firm’s dividend payments during the previous 5 years. If your company paid dividends more often than once a year, sum up all dividends to find the total yearly dividend. Using the dividend discount model, estimate the return that investors currently require for holding your company’s stock. You can assume that the firm’s dividends will continue to grow indefinitely at the same rate as the average dividend growth rate in the previous five years, or you can make alternative assumptions on the future dividend payments, as you see fit.
4: Dividend policy
In this part of the assignment, you will provide an overview of the company’s payout policy in recent years. Which percentage of the company’s earnings was distributed to investors as dividends? Which percentage of earnings was reinvested in the company? Did the company engage in dividend smoothing? Did the company do any share repurchases in recent years? (One way to find out about share repurchases is to investigate any changes in number of outstanding shares on the company’s balance-sheets between different years). Why do you think the company made these decisions?
Write a brief conclusion of your assignment. Would you recommend investors to invest in the securities of this company? Why? Link back to all previous parts of your analysis in this assignment.
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