LU 456 Cost of Equity and Debt Worksheet
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
LU 456 Cost of Equity and Debt Worksheet
Photovoltaics, Solar
1) Assessment
The paper (report) will make up 100% of the coursework assignment. The following aspects will be taken into consideration:
Application of theory and critical analysis
Empirical analysis (statistical, econometric analysis is appreciated but not mandatory)
Use of source materials (e.g. EUROSTAT, OECD statistics, World Bank statistics)
Structure (see below)
Spelling and grammar, academic style
Paper has to include (for selected company):
Calculation of cost of (own) equity capital (CAPM or other model)
Calculation of cost of borrowed capital
Calculation of WACC (in the context of optimal capital structure of a business)
Forecasts of revenues for next 5 coming years (in the context of contributions made by investment projects, mergers and acquisitions to corporate growth)
Simplified forecasts of financial statements (balance, income statement, ). “Simplified” means: you can present only most important and needed, in your opinion, fragments of balance, income statement. Forecast method that you can you in this point can be based on “ratio/proportion to” (e.g. percentage of sales method) analysis. E,g. if you observed that the ratio of sales/assets or ratio of sales/current asset or any other you need is more or less stable for historical data, you can use this historical ratio to produce forecast for calculation of future assets or current assets or any other part of the statement that you can need. Of course it is more welcome to produce more detailed analysis, but lack of it will not have negative effects.
Forecast of the rate of growth of FCFF of the company (“g”) (in the context of corporate life cycle theory)
Estimation of the company’s share price by discounted cash flow method (DCF of FCFF)
Analysis of the sector in global (world) scale
Elements that report has to include:
Rf- risk free rate (short and long term),
Rm- rate of return from market index or risk premium (long term),
B- beta parameter,
Capital structure (short and long term)
Forecasts of revenues (short and long term)
Forecasts of investment projects (short and long term)
Should be calculated as (weigted) average of following methods:
Expert method/ Delphi method – reports/recommendations of stock market analyst, sector reports, forecasts of finance expert e.g. A. Damodaran, forecasts of company’s executive board, forecasts of IMF, OECD, ECB, MF, WB
Own calculations – “standard” methods of the calculations (regression, average of historical growth, fixed proportion of base value, e.g. revenues, assets), give the reasoning for assumptions and information of:
Own calculations – non-standard methods (based on long term interest based on inflation targeting; usage of data of competitors or whole industry; data from national statistical offices, like: tendencies of consumption of particular goods, demographics trends, etc), give the reasoning for assumptions and information of:
– chosen period,
– sources,
– used equations
– chosen period,
– sources,
– used equations
Project structure requirements
- Project will be undertaken by 1student
b.The student need to deliver electronic copy of only his/her work (without bibliography) in the .doc file that is named: Surname_Name_IDnumber_ IFS. Hereinafter referred to as “individual electronic version”.
- Student need to deliver whole report hereinafter referred to as “individual report” (with bibliography) in the .doc file that is named: ..
- Paper should have following structure:
- INTRODUCTION (about 10% of the essay):
(Your interpretation of the title, what issues you are exploring, the importance of the issues)
- MAIN BODY (about 80% of the essay):
Has to include underlined headlines and structure:
Short characteristics of the company
Short characteristics of the sector
Calculation of cost of (own) equity capital (CAPM or other model)
Calculation of cost of borrowed capital
Calculation of WACC (in the context of optimal capital structure of a business)
Forecasts of revenues for next 5 coming years (in the context of contributions made by investment projects, mergers and acquisitions to corporate growth)
Simplified forecasts of financial statements (balance, income statement)
Forecast of the rate of growth of FCFF of the company (“g”) (in the context of corporate life cycle theory)
Estimation of the company’s share price by discounted cash flow method (DCF of FCFF)
Analysis of the sector
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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LU 456 Cost of Equity and Debt Worksheet
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