Read carefully
Presentation of the company: business model; industry, its peers and the company’s position within that group; history; leadership; etc.
Fundamentals of the company: past performance of the stock; revenue and earnings and their development over the years; appropriate financial ratios.
Price and price expectations: based on the previous section, run a DCF analysis to arrive at your best estimate for the intrinsic value of the company and your best estimate for the share price. Clearly explain your assumptions and provide two alternate scenarios. The report should contain the main table of the DCF for readers to observe your calculations and assumptions. For your DCF you need to find beta which you can do with a regression analysis, as well as the credit rating. Feel free to reach out to me if you need help with the credit rating and its implication for cost of debt.
Risks and headwinds: your DCF is based on assumptions about the future of the company, its industry environment, and the market and business environment. How sensitive is your analysis to this? More specifically, what are the headwinds and risks that the company faces in its operations in the near and medium-term future?
Conclusion and recommendation for three investors (see below).
The stock report must be submitted as a word document. Use the APA style formatting. Font size 12.Additionally, attach the Excel spreadsheet in which you performed your analysis. You have to create your own excel spreadsheet; that means, downloading, using and submitting prepared DCF(discounted cash flow) Excel documents from the Internet will lead to a loss of points.
Note: You MUST submit an excel file that shows how you calculate the DCF (discounted cash flow) to me. You can find CMG stock information on Yahoo finance. For calculate the DCF (discounted cash flow), you need to find the 10-K form which is on Security Exchange Commission official website or on Yahoo finance. Just following the “Reading carefully” steps. Thank you.
The DCF(discounted cash flow) formula is in the PPT
For calculating the WACC, you can find the formula in PPT.
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