Part I: Introduction
Provide a 1-2 page background on your company.
• When was it formed?
• By whom?
• Where is their headquarters located?
• What are some notable events in the company? (Changes is executive leadership, new products/services that had a huge impact on the firm, large increases or decreases in their stock prices and the reason why, buyouts/mergers, etc.)
• Describe how they performed during the pandemic. Did they grow or shrink? How did they adjust to accommodate the shutdown?
Part V: Capital Structure
Describe the firm’s capital structure.
• What is the Weighted Average Cost of Capital (WACC)?
• Discuss this firm’s debt/asset ratio.
• Calculate and discuss the Degree of Operating Leverage.
• Calculate and discuss the Degree of Financial Leverage.
• Calculate and discuss the Degree of Total Leverage.
Part VI: Dividend Policy
Describe the firm’s dividend policy as one of:
• Residual dividend policy
• Stable, predictable dividends
• Constant payout ratio
• Low, regular dividend plus extras
Has the stock split in the past three years? If so, how many shares did the split offer? What was the resulting stock price? Compare it to the current stock price. Using concepts from the textbook, explain if the stock split accomplished what was intended.
Has the firm conducted any stock repurchases in the past few years? If so, how has it affected the stock price?
Part VII: Conclusion
Write a substantive paragraph(s) summarizing what you learned about the company by doing this project. Explain how the information you learned during this class will be used to inform your investing decisions in the future.