you will have to do question 1 & 3In question one i need answers with diagrams and graphs and in question 3 i need some theory for each variable and the calculation and reference from where you get the values of the variables. each answer 2 pages
Team Valuation Report: Semester 1, 2020 The company selected for this report is: Telstra Corporation Limited Ticker code: TLS.AX Your team (comprising 2-5 students) is requested to advise a well-diversified high net-worth in- dividual who is interested in investing in shares with a fundamental value greater than the share price. As a financial analyst, you are required to write a detailed recommendation report on whether to invest in the selected company. The report shall be structured in 5 Sections (preceded by a brief executive summary) to address the following questions of your client: 1. What are the competitive forces behind the industry’s structure? How does competition affect the margins of the industry and the company? How does the company’s profitability compare rela- tively to its peers (you should select between 3 and 5 industry peers)? What is the firm’s business strategy? Please highlight potential investment risks the company could face in the future (please refer to Lectures 1 and 2); 2. Analyse how the market is pricing the firm using different relative (or market) valuation tech- niques. Please use the same group of industry peers identified in the previous section (please re- fer to Lectures 3 and 4); 3. Estimate carefully the cost of debt, cost of equity and cost of capital for this company (please re- fer to Lectures 6 and 7); 4. Estimate the free cash flows of the company (please refer to Lectures 8 to 10); 5. Estimate the target price of the company, issue a buy/hold/sell recommendation to your client, and draw your conclusion. (please refer to Lectures 11 and 12). Your report is expected to be submitted by 11:59 pm Sunday 31 May 2020 AEST (please refer to the unit guide for more information about late submissions). Your submission should contain all of the following: (i) A 7 to 10 page recommendation report (in font Times New Roman – font size 11) in Word or PDF, discussing the scope of the work, your justified assumptions, findings and recommen- dation. Please refer to examples of professional analyst reports (available on iLearn) when formatting your team report; (ii) A cover page indicating: (a) your team name; (b) members’ name, student number, email address, and allocated section of the assignment; and (c) class time. Failure to indicate the stu- dents’ allocated section of the assignment on the cover page will result in significant deductions. Please also identify the team leader for email correspondence. Your cover page should be the first page of your assignment, and is not counted in the limit of 10 pages; (iii) A spreadsheet model (in Excel), showing all your numerical assumptions, steps of the esti- mation, and company’s valuation. The team leader ONLY should submit the equity report to the Turnitin class-link that will be activat- ed on iLearn. The team leader should also submit the Excel file containing all the calculations in a separate folder that will also be available on iLearn. Please give both these files your team name (e.g., BestTeamEver01.xls, and BestTeamEver01.doc or BestTeamEver01.pdf). More information on the submission process will be provided in class in Week 10 or 11. The marking criteria will be as follows: Criteria Marks Assumptions and bases 10 Numerical accuracy 5 Interpretations and Recommendation 10 Overall quality of the report (format and language) 5 Total 30 Note: -Use sub-headings that contain the question number as a title. Answer the questions in the order they're asked. -Write in a 'front focused' manner. State the most important things up front. For example in ques- tion 5, state your buy, hold or sell recommendation, fair value estimated stock price and actual market price in the very first sentence. -Extra evidence such as graphs and tables is highly desirable. They must be placed in-text. Figures or tables should be placed directly above or wrapped in the paragraph that they are discussed in. Do not put figures in the appendix; they will not be marked. Also note that your written test file will usually be the only thing that we read and examine. The spreadsheet will only be used to check for inconsistencies. -Use in-text referencing of sources. For example: "...the equity premium relative to long-term gov- ernment bonds was an annualized 3.8%. The expected equity premium is lower, around 3% to 3½% on an annualized basis." (Dimson et al 2011). Put a bibliography at the end of your assign- ment: Dimson, Elroy and Marsh, Paul and Staunton, Mike, Equity Premia Around the World (Oc- tober 7, 2011). Available at SSRN: https://ssrn.com/abstract=1940165 or http://dx.doi.org/10.2139/ssrn.1940165 https://protect-au.mimecast.com/s/P8UaCRONg6sgNGrms9Cbtr?domain=ssrn.com https://protect-au.mimecast.com/s/D8XuCVARmOHPM2lwIzs4__?domain=dx.doi.org