代做Business Analysis and Valuation代写留学生数据结构程序

Business Analysis and Valuation

You and your groupmates are required to complete a “team project”. The project is to be submitted on the LMS for the unit at 5pm, WST, by 13 May 2024. The link for submissions will be available 24 hours before the deadline. Your team will then present key findings during your allocated tutorial in Week  11 or Week  12. Please refer to the Unit Guide for information.

The following documents are required in your submission:

-    A Complete report in Microsoft Word

-    An Excel file including all your calculations. Please make sure that you label your Excel  sheets clearly for the audience (e.g., “Input Data & Beta Estimate”, “Scenarios Analysis” etc etc).

Peer feedback and assessment will also be used to allow every team member to comment on and assess the contribution of his/her groupmates to the project. To facilitate this, we will use a software called SPARK (Self and Peer Assessment Resources Kit). Your final individual score will be weighted by the SPARK score you receive from your groupmates. Information about SPARK is available in the unit outline and on LMS.

Please make sure that your assignment report does not exceed  12 pages, excluding the Title Page, the Reference List, and the Appendices.

You may discuss the case with your classmates, but what your group submits must be your own work. All clarifying questions are to be directed to the lecturer only.

The Assignment

You  are  working  at  a  boutique  advisory  company  AMV  in  Perth  as  an  equity  research analyst.  A  customer  approached  you  and  asked  you  to  provide  her  a  recommendation regarding Santos Ltd (ASX: STO).

The website of this firm and its latest news can be found in the following link:

https://www.santos.com/news/

On the top panel, you will find a heading called “INVESTORS”, where details on the share price, latest announcements, financial reports, governance, and other important information can be found.

https://www.santos.com/investors/

https://www.santos.com/investors/company-reporting/

Besides, analysts’ forecasts and other important details about this firm can be found in the following links on yahoo finance and ASX:

https://www.asx.com.au/markets/company/STO

https://au.finance.yahoo.com/quote/STO.AX/

Required:

Prepare  an  equity  research  report  for  this  firm.  In  the  valuation  section,  please  use  the discounted cashflow  (DCF) model  as the main tool  for your  analysis  (compulsory). You should also use the P/E multiple and other multiples as the cross check (optional).

In your report, you are required to:

(i)        Estimate the enterprise value.

(ii)       Estimate the equity value.

(iii)      Use the equity value from your estimates and a number of stocks available in the market

for Santos, calculate the stock value and then compare it with the current market price as of May 2024; and

(iv)      Provide your recommendations to your client.

Additional Tips:

You need to calculate the required rate of return on Santos. To calculate it, you first need to find the risk-free rate of return on 5-year (or 10-year) government bonds from the Reserve Bank of Australia’s website:

http://www.rba.gov.au/statistics/tables/#interest-rates

Second, you need to find out the beta of the stock by regressing the monthly (or daily or weekly) stock returns on the monthly (or daily or weekly) index returns using the following regression:

Ri  = a + β . Rm  + ε

The coefficient you obtain from the above regression β is the stock’sbeta.

Third,  you  may  also  need  to  estimate  or  search  for  the  market  risk  premium  (MRP)  for Australia. With your estimated risk-free rate, equity beta, and MRP, using the CAPM to work out the estimated cost of equity.

Fourth, you may need to look for the cost of debt for Santos. Alternatively, you can estimate cost of debt for Santos by conducting some bond valuation.

Fifth, you now have cost of debt, cost of equity. Together with Santos’ capital structure and Australia’s corporate tax rate, you can calculate the weighted average cost of capital. For simplicity, imputation credits in the Australian tax system will be ignored in our analysis.

The cost of capital (WACC) is used as the discount rate in your valuation using the DCF approach.

Various   lectures    cover    these   important    concepts.    Some   technical    aspects    are demonstrated during your lectures. As such, attending the lectures and/or listen carefully to the recorded lectures are important to complete this major assignment.

Your report should include not only the valuation, but also all-important details about the firm. However, when you prepare your report, please follow the following “Road Map” :

Section	Mark Allocation
Basic information and Investment Summary	2
Business Description
Industry Overview and Competitive position
Financial Analysis (Historical & Forecasts)	4
Valuation (including WACC estimates)	12
Investment Risk (internal and external)	2
Management and Governance
Sum	20

What to include under each section can be found from the CFA Institute using the following link:

https://www.cfainstitute.org/-/media/documents/support/research-challenge/challenge/rc- equity-research-report-essentials.ashx

The link above tells you what to include in each section. However, when you prepare the report, please follow the structure I mention in the above table.

Finally, please do not forget to cite the source of any external information you use. Please make sure you use consistent referencing style (APA or Harvard)