solved 6 Requirement Assignment. Please ensure you use at least 5

6 Requirement Assignment. Please ensure you use at least 5 references and 10 in text citations. Early Submission is appreciated. Additionally, any computations shall be done through excel unless noted otherwise. Each assignment will be a separate document. Please utilize the example template below. Module 1 is attached for reference. Use the company “Walmart” for continuation of the SLP. Ensure module 4 and any other module has an excel that utilized the template provided in the reading material to accompany it. Module 2 – SLPSTOCK AND BOND VALUATIONFor your second SLP assignment, continue to do research on the company you chose to write about for your Module 1 SLP. This time you will be doing research about the valuation of the company to try to determine if its stock price is overvalued or undervalued. You can use Google Finance, Yahoo Finance, or similar Web pages to find the financial information about this company.Write a 2- to 3-page paper with the following items:What is the P/E ratio of this company? How does the P/E ratio compare to other companies in this industry? Based on the P/E ratio, do you think the company is overvalued or undervalued?Find the company’s balance sheet. Calculate the book value of each share. This can be done by taking the total assets and subtracting total liabilities. Then divide the number you get by the total number of outstanding shares. Is the number you get higher or lower than the current price of the share? Based on what you’ve found, would you say the stock is overvalued or undervalued?Finally, do a search on what different analysts have to say about your company. Do they generally recommend buying the stock or selling the stock? What reasons to they give for their assessment? Find at least three analyst reports about this company.SLP ASSIGNMENT EXPECTATIONSAnswer the assignment questions directly.Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.For computational problems, make sure to show your work and explain your steps.For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.Module 2 – BackgroundSTOCK AND BOND VALUATIONREQUIRED READINGStart off with these two tutorials that will give you an overview of the basic methods of valuing stocks and bonds from Subjectmoney:Subjectmoney. (2013, January 2). How to price/value bonds – formula, annual, semi-annual, market value, accrued interest [Video file]. Retrieved from https://www.youtube.com/watch?v=7zCqoED8MVkSubjectmoney. (2013, January 3). Dividend discount model (DDM) – constant growth dividend discount model – how to value stocks [Video file]. Retrieved from https://www.youtube.com/watch?v=n76Pz3HOBPoNow dig much deeper into bond and stock valuation with the following books chapters. They cover not only the computational methods but also provide a general overview of stock and bond markets:Ross, S., Westerfield, R., & Jordan, B. (2007). Chapter 6: Interest rates and bond valuation. Essentials of Corporate Finance. McGraw Hill. Retrieved from http://novellaqalive2.mhhe.com/sites/dl/free/007000000x/484691/Part4_Chap6.pdf [If this link is down, click Interest Rates and Bond Valuation for an alternative link.]Fabozzi, F. J., & Peterson Drake, P. (2009). Chapter 7: Asset valuation: Basic bond and stock valuation models. Finance: Capital markets, financial management, and investment management. Wiley. Available in the Trident Online Library.Finally, for some examples of valuation calculations in Excel see the following videos:Moy, M. (2014). Bond valuation in Excel. Retrieved from https://www.youtube.com/watch?v=H-_NP0UxX_UGirvin, M. (2010). Stock valuation with dividend growth model. ExcellsFun. Retrieved from https://www.youtube.com/watch?v=cbRIhwkGAnQGirvin, M. (2010). Stock value based on present value of future dividend cash flows. ExcellsFun. Retrieved from https://www.youtube.com/watch?v=G2VIY5E3I3s&t=163sOPTIONAL READINGDavis, A. (2016). Bond pricing. Retrieved from https://www.youtube.com/watch?v=-DnARyndirIAhmad, A. (n.d.). Bonds part II: Pricing. Coursera. Retrieved from https://www.coursera.org/learn/finance-markets/lecture/EpByC/bonds-part-ii-pricingOzoguz, A. (n.d.) Basics of equity valuation. Coursera. Retrieved from https://www.coursera.org/learn/global-financial-markets-instruments/lecture/vHPRN/basics-of-equity-valuationVishwanath, S. (2007). Chapter 24: Debt markets. Corporate finance: Theory and practice. SAGE Publications India. Available in the Trident Online Library.Module 3 – SLPCAPITAL BUDGETING AND THE COST OF CAPITALFor your Module 3 SLP assignment, continue to do research on the company that you wrote about for Modules 1 and 2. For this assignment, you will be estimating the weighted average cost of capital (WACC) for your chosen company. The final calculation will be fairly straightforward, as it involves just plugging in some numbers into an equation. However, the more challenging task will be finding the necessary numbers to plug into the formulas. You will need information such as the beta for your company, the bond-rating, and various information from its balance sheet. Links to some suggested Web pages for finding this kind of information is included in the instructions, but you might be able to find other sources of information. Go step by step and present your information for Steps 1-4 below in a Word document. Make sure to show all of your steps one by one and include the sources of your information:Find out your chosen company’s credit rating. Rating agencies such as Moody’s and Standard and Poor’s assign ratings to companies. AAA is high, AA is lower, BBB is even lower, etc. The higher the rating, the lower the cost of debt capital. Explain what your company’s credit rating is and the reasons for the high or low rating based on your research. Also, use the Fidelity Fixed Income Web page to find out what the current return is for a 30-year bond for a corporation with the rating that your company has. This yield will be the approximate cost of debt capital for your company. We will call the cost of debt RD.Now estimate the cost of equity for your company. First you will need the beta; you already found this for your Module 1 SLP. You will also need the three-month treasury bill yield, which we will use as our measure of the risk-free rate. This rate should be listed on the Fidelity Fixed Income Web page linked above. Finally, you will need the equity risk premium. You can find estimates of this on many Web pages including Fidelity Fixed Income or Gutenberg Research. It is usually around 5%. Once you have this information, you can estimate the cost of equity as the 30-year treasury bill yield rate plus beta multiplied by the equity premium:Cost of Equity = risk-free rate + Beta * (Equity Premium).Show your calculations. We will call the cost of equity RE.Now find out how much of the firm’s capital is equity and how much is debt. For the total value, look at the balance sheet for your company as found on Google Finance or a similar Web page. The total value of your company will be “total liabilities and shareholder’s equity.” The proportion of debt will be total liabilities divided by total value, which we will call D/V. The proportion of equity will be shareholder’s equity divided by total value, or E/V. If you calculate them correctly, the proportions will add up to one.Now we have all the information we need to get at least a rough ballpark estimate of WACC. Let’s assume a corporate tax rate of 35%. So the formula we will use is WACC = (E/V)* RE +(D/V)* RD *(1-.35)Calculate WACC and show your computations. As a “reality check” on your calculations, the WACC should likely be in the single digits and positive. Compare what you found to the average WACC in your company’s industry, which should be available on Web pages such as Cost of Capital by Sector (US). Note that 35% is the official corporate tax rate, but many corporations find tax breaks. If your WACC is too low, try computing it with a lower tax rate such as 25% or 10%. SLP ASSIGNMENT EXPECTATIONSAnswer the assignment questions directly.Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.For computational problems, make sure to show your work and explain your steps.For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.Module 3 – BackgroundCAPITAL BUDGETING AND THE COST OF CAPITALREQUIRED READINGStart off the module by viewing these videos from Professor Roberts of the Wharton School of Business at the University of Pennsylvania and Professor Roberts of Rice University. These videos will give you a general overview of the key concepts of capital budgeting and the cost of capital:Roberts, M. (2017). Decision criteria. Coursera. Retrieved from: https://zh.coursera.org/learn/wharton-finance/lecture/hRuBX/decision-criteriaWeston, J. (2017) Putting it all together as WACC (weighted average cost of capital). Coursera. Retrieved from: https://www.coursera.org/learn/finance-for-non-finance/lecture/07ldB/putting-it-all-together-as-the-wacc-weighted-average-cost-of-capitalRoss, S., Westerfield, R., & Jordan, B. (2007) Chapter 8: Net present value and other investment criteria. Essentials of Corporate Finance. McGraw Hill. http://novellaqalive2.mheducation.com/sites/dl/free/007000000x/484691/Part5_Chap8.pdf[If the link is down, click Net Present Value or Fundamentals of Corporate Finance for an alternative link]Ross, S., Westerfield, R., & Jordan, B. (2007) Chapter 12: Cost of capital. Essentials of Corporate Finance.McGraw Hill. Retrieved from: http://novellaqalive2.mheducation.com/sites/dl/free/007000000x/484691/Part7_Chap12.pdf[If the link is down, click Cost of Capital or Fundamentals of Corporate Finance for an alternative link]Finally, check out the following video that will show you how to make capital budgeting calculations using Excel:Graulich, V. (2012). How to calculate NPV and IRR. IHateMath.com. Retrieved from: https://www.youtube.com/watch?v=kCnwCplibAk&t=230sHamilton, K. (2014). Excel NPV IRR. Retrieved from: https://www.youtube.com/watch?v=HTJh5yxphMsIf you still have difficulty with the material after reviewing the required materials, check out the optional materials below. Included are two additional videos, including one on using Excel to compute NPV and IRR. Also included are some additional book chapters that cover the same material but explain it in a slightly different way with different examples.OPTIONAL READINGBlueBookAcademy.com. (2015). Learn it FAST: Weighted average cost of capital explained. Retrieved from: https://www.youtube.com/watch?v=JIvokDfW9AQ&t=48sGirvin, M. (2010). Investment criteria: NPV, IRR, payback, AAR, profitability index. Retrieved from: https://www.youtube.com/watch?v=U2aH4xH5Fz0Fabozzi, F. J., & Peterson Drake, P. (2009). Chapter 14: Capital budgeting techniques. Finance: Capital markets, financial management, and investment management. Wiley. Available in the Trident Online Library.Clive, M. (2012). Chapter 14: The cost of capital. Financial management for non-financial managers. Kogan Page. Available in the Trident Online Library.Block, S. & Hirt, G. (2008). Chapter 12: The capital budgeting decision. Foundations of Financial Management. McGraw-Hill, Retrieved from: http://studylib.net/doc/8149455/12-the-capital-budgeting-decisionModule 4 – SLPLEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICYReview the 1) dividends for the past three years and 2) capital structure of the company you have been researching for your SLP assignment. Then answer the following questions in a Word document (except for the Excel portion specifically noted). The paper should be 2 pages in length.What has occurred with your selected company’s dividend payout, dividend yield, and dividend per share over the past three years? Do you have any explanations for what has occurred? Also, has this company had any stock splits or stock repurchases in recent years?How does your selected company’s dividend payout, dividend yield, and dividend per share compare with other companies in its industry? Has the company’s dividend strategy been similar to other companies in its industry?Use Excel to plot your selected company’s earnings and dividends over the past three years. Do you notice any patterns? What dividend policies from the background readings best match these patterns?SLP ASSIGNMENT EXPECTATIONSAnswer the assignment questions directly.Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.For computational problems, make sure to show your work and explain your steps.For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.Module 4 – BackgroundLEVERAGE, CAPITAL STRUCTURE, AND DIVIDEND POLICYREQUIRED READINGCapital StructureStart by viewing the following video. It will introduce you to capital structure and provide you with a basic understanding of the main topics from this module:Obi, P. (2014). Capital structure and financial leverage. Purdue University. Retrieved from: https://www.youtube.com/watch?v=xKBdJX-rHMgNow go through the following tutorials from Investopedia which include some videos. Start out with the tutorial on degree of operating leverage, then scroll down to the sections on earnings before interest and taxes and degree of financial leverage:Degree of operating leverage. (n.d.). Investopedia. Retrieved from: http://www.investopedia.com/terms/d/degreeofoperatingleverage.aspNow dive deeper into the concepts of capital structure with the following two book chapters. Pay special attention to the concepts of operating leverage, financial leverage, business vs. financial risks, and the major theories of capital structure choices. While the tutorials above will give you a broad overview of the main topics, the following readings have worked out problems and solutions that will be essential for completing the Case Assignment:Vishwanath, S. (2007). Chapter 19: Optimal capital structure. Corporate finance: Theory and practice. SAGE Publications India. Available in the Trident Online Library.Brigham, E. & Houston, J. (n.d.). Chapter 13: Capital structure and leverage. Fundamentals of Financial Management.Cengage Learning.Finally, take a look at the following book chapter on dividend policy. Take a close look at the concepts of regular dividend policy and low-regular-and-extra dividend policy, as well as stock splits and stock repurchases:Clive, M. (2012). Chapter 15: Dividend policy. Financial management for non-financial managers. Kogan Page. Available in the Trident Online Library.OPTIONAL READINGAhmad, A. (n.d.) Firm debt part 1: Calculating how much to borrow. Coursera. Retrieved from: https://www.coursera.org/learn/finance-debt/lecture/0P8l0/firm-debt-part-1-calculating-how-much-to-borrowSexton, N. (2010). Introduction to dividend policy. LSBF Global MBA. Retrieved from: https://www.youtube.com/watch?v=wPVdxCJ2iCI11 days agoATTACHMENTSexample.docxModule 1 – CasePRESENT VALUE AND THE RISK/RETURN TRADE-OFFASSIGNMENT OVERVIEWFor this assignment, make sure to first carefully review all of the required readings about present value, future value, risk and return, and the CAPM. Once you are relatively comfortable with these concepts, try working through some of the examples in the background readings and try computing the answers on your own. Once you are confident you both understand the concepts and the computational steps, complete the assignment below.CASE ASSIGNMENTPresent your answers to the problem below in a Word document, and also upload an Excel file with your computations. Excel is required for Questions 2 and 3. Excel is optional for Questions 1 and 4, but you are required to show your steps for all quantitative problems. Even if you get the answer wrong, you can still get partial credit if you show your work.Calculate the following:Suppose you wish to raise some money for your favorite local charity. This charity needs $50,000 a year to run its operation and you want to make sure that it is ensured an annual payment of this amount from now on for every year in the foreseeable future. Given an interest rate of 5%, how much would you have to fund this perpetuity to guarantee the charity a payment of $50,000 per year?You decide to put $1,000 in a new bank account and don’t plan to withdraw the money for 10 years. If your bank does continuous compounding and the interest rate is 1%, what will be the value of this bank account in 10 years?Suppose you won the lottery but not all of your winnings will come in one year. Instead, you will get a series of annual payments over the next five years. The table below tells you what your payment will be every year for the next five years. Use the information in the table to make the following computations:The present and future value of your lottery ticket if the interest rate is 8%The present and future value of your lottery ticket if the interest rate is 10%YearPayment1500026000370004800059000The table below gives the probability of different returns for three different assets. Using this table, calculate the following:The expected return of each assetThe standard deviation of returns of each assetThe coefficient of variation of each assetBased on your answers to B) and C) above, which asset has the highest total risk and highest relative risk?Asset AAsset BAsset CProbabilityReturnProbabilityReturnProbabilityReturn0.350.1250.140.480.3200.850.390.5150.160.114Suppose the market return is 8%, the risk-free rate is 1% and the beta for a given stock is 1.2. Answer the following questions based on this information:What is the required return for this stock?If the beta increases by 50% (but risk-free rate remains 1%), what will be the new required return for the stock? What is the percentage-wise change in required return compared to your answer to A) above?If the market return increases by 50% (but beta remains at 1.2), what will be the new required return for the stock? What is the percentage-wise change in required return compared to your answer to A) above?Suppose there are three different companies. The first one, Trendy Tech Inc., has investors who are “fair-weather friends.” When the stock market is going up, everybody wants to invest in Trendy Tech, but as soon as the market goes down everyone jumps ships and sells their shares. The second company is Oily Oil Inc. Oily’s stock price seems to depend only on the price of oil and nothing else. Finally, there is Conglomerated Conglomerate Inc. Conglomerated is a giant company with holdings in almost every industry imaginable—from cell phones to grocery stores and even amusement parks. Based on this information, which company would you think has the highest beta? The lowest beta? Which one do you think has a beta closest to 1?ASSIGNMENT EXPECTATIONSAnswer the assignment questions directly.Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.For computational problems, make sure to show your work and explain your steps.For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.Module 1 – BackgroundPRESENT VALUE AND THE RISK/RETURN TRADE-OFFTo begin the module, start off with these two videos to give yourself an overview of the main concepts covered in this module. The first video is from Professor Holthausen of the Wharton School of Business at the University of Pennsylvania. He explains the concept of the time value of money and also goes through some calculations using Microsoft Excel. The second video is from Professor Pinder of the University of Melbourne and covers some basic concepts of risk and return.Holthausen, R. (2015). Time value of money. Coursera. Retrieved from: https://www.coursera.org/learn/wharton-decision-making-scenarios/lecture/ZE2tE/1-2-time-value-of-moneyPinder, S. (2017) Unsystematic versus systematic risk. Coursera. Retrieved from: https://www.coursera.org/learn/valuation/lecture/LLtZP/2-1-unsystematic-versus-systematic-risk-getting-rid-of-unrewarded-riskA second video from Dr. Pinder on the capital asset pricing model is highly recommended but not required. A link to Dr. Pinder’s video is included under the optional reading list below.Once you have finished viewing the videos, take a closer look at the concepts covered in the videos by reading through these book chapters. In addition to reading about the basic concepts, make sure to work through some of the numerical examples as these will help you with your assignments:Vishwanath, S. (2007). Chapter 2: Time value of money. Corporate finance: Theory and practice. SAGE Publications India. Available in the Trident Online Library.Vishwanath, S. (2007). Chapter 3: Risk and return. Corporate finance: Theory and practice. SAGE Publications India. Available in the Tri