Thank you for looking at the below!
I am struggling with this assignment, I am unable to determine the below questions based off the attached 10K. I have also attached a spreadsheet from another answer to a part of this question (tab 2 on the excel sheet) as well as the actual assignment. I need this ASAP! Any help would be appreciated and also explanations to the answers too, so I can understand it
Specifically, the following critical elements must be addressed:
II. Stock Valuation
A. Based on the figures provided, calculate each of the following:
1. The new dividend yield if the company increased its dividend per share by 1.75
2. The dividend yield if the firm doubled its outstanding shares
3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above
B. What effect would you expect each of the calculations you performed to have in terms of shareholder value? In other words, suppose the company’s goal is to maximize shareholder value. How will each of the situations support or inhibit that goal? Be sure to justify your reasoning.
C. To what extent do you feel the company’s dividend policies support or hinder their strategies? For example, if the company is attempting togrow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends? Be sure to substantiate yourclaims.
III. Bond Issuance
A. Assuming this company already has bonds outstanding, calculate the following:
1. The new value of the bond if overall rates in the market increased by 5%
2. The new value of the bond if overall rates in the market decreased by 5%
3. The value of the bond if overall rates in the market stayed exactly the same
B. What effect would you expect each of the calculations you performed to have in terms of the company’s decision to raise capital in this manner?In other words, for each situation, would you consider bond valuation to be a viable option for increasing capital? Be sure to justify yourreasoning.
C. To what extent do you feel the company’s bond issuance policies support or hinder their strategies? For example, if the company is attempting tofund operating expenses, refinance old debt, or change its capital structure, are they issuing sufficient bonds to achieve these goals? Be sure tosubstantiate your claims.