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(solved) Project Report on Finance

   

Added on  2020-03-16

15 Pages3747 Words68 Views
Running Head: Finance1Project Report: Finance

Finance2ContentsIntroduction.......................................................................................................................3Debt valuation...................................................................................................................3Share valuation.................................................................................................................4Cost of capital...................................................................................................................6Market analysis.................................................................................................................8Conclusion........................................................................................................................8References.........................................................................................................................9

Finance3Introduction:Investors are the main stakeholders of a company. Investors help a company to enhance the funds for new projects and investment plan of the company. It is said by everyone that investor are required to investigate and analyze the entire factors and aspect of the country, economy, industry and company before invest their savings and amount into the company. In this report, DATA#3 LTD company has been taken into the context. For identifying the worth of the company, various tools and techniques have bene analyzed. Mainly, a study has been conducted over the debt valuation in which cost of debt of the company has been analyzed, next, share valuation has been done and cost of equity has been analyzed. Further, cost of capital, market analysis etc has been done.Data# 3 limited is an Australian company which has been registered in the ASX. The head office of the company is in Brisbane. It is an information and communication technology company. This company has been founded in 1984 and currently this company isenhancing its revenue rapidly. Debt valuation:Data#3 LTD’s annual reports and other financial websites have been investigated to evaluate the ways through which company could enhance the funds. In this report, long term debt and short term debt of the firm has been investigated firstly (Appendix). Following table depict about the debt condition of the company:Data 3 LTD 20172016201520142013Long term debt60280006161000327500031330003557000Short term debt3428200032154000328620003084900026578000(Morning star, 2017)For analyzing the debt position of the company in a better manner, competitive company’s debt position has been evaluated which is as follows:Startec biomedical AG20172016201520142013Long term debt3000000415000327500031330003557000Short term debt69000000415400200000200000265780(Morningstar, 2017)

Finance4The analysis over the debt position of both the companies, it has been found that the long term debt position of the company is almost similar but the level of short therm debt of the competitive company is quite more than the Data#3 limited. According to the above analysis over the company, it is suggested to the company to manage the level of short term debt according to the competitive company and through the analysis, it has also been observed that the long term debt of the company is according to th e industry standards. The below table depict about the cost of debt of the company:Calculation of cost of debtOutstanding debt6028000interest rate5%Tax rate0.3Kd0.0350(Bloomberg, 2017)The above table of cost of debt of Data#3 limited depict that the total cost of debt is 0.0350. According to it, company is required to pay 0.0350 to every debt holder of the company (Appendix). The study of the debt valuation of the company express that the cost ofdebt of the company is quite lower and the level of debt of the company is also lower. And that is why the total cost of debt of the company is lower. Share valuation:For analyzing the value of shares of the company, annual reports and other financial websites have been investigated. In this report, total equity of the firm has been investigated firstly. Following table depict about the debt condition of the company:Dividend Discount ModelDividend expected0.000174085Growth rate17%Price per share1.69cost of equity16.5783%(Yahoo finance, 2017)According to the dividend discount model evaluation over the cost of equity of the company, it has been found that the total cost of equity of the company is 16.5783% which

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