Equity Valuation Project Requirements by EG92DV


									(Moore)       Comprehensive Business Valuation Project Guidelines
            Equity Valuation Project Requirements
The purpose of this project is for student teams to prepare a comprehensive
business analysis and equity valuation report. The report will be judged against
the quality of proprietary valuations reports prepared in the professional
investment community. Hence, format, understandability, clarity, quality and
depth of analysis, breadth of coverage, professionalism of the report will be
considered in the grade determination.

Candidate Firms:
First and foremost, students should select firms and industries they find of
interest. Selected firms should be widely held firms. This increases the likelihood
information will be available to perform the analysis and valuation. The firms
must have a market capitalization of at least $500 million (price x number of
shares). Dell Corp. is not an acceptable firm as much of the analysis has been
provided in the text. The same holds for Wal-Mart as we frequently use it for in-
class demonstration purposes.

Analysis and Report Content and Format:
      A.    Finished Report Guidelines
            1. Length of Report–Target around 175-300 pages, 12pt Font, 1.5
            2. Final report must be bound, single-sided print, publication quality
   B. Contents and recommended order:
      1. Cover Sheet
      2. Executive Summary (3 pages)
      3. Industry Overview and Analysis (Five-Factor Model)
      4. Firm Competitive Advantage Analysis (Historical, Current, Future)
      5. Accounting Analysis of Firm and Industry (Key Policies, Quality)
      6. Financial Statement Ratio-Based Analysis
           (Industry & Firm: Trends and Comparables)
      7. Forecast Financial Statements and Analysis
      8. Cost of Capital Estimates (WACC, Ke , Kd )
           Direct Estimates (CAPM)
           Implied Cost of Capital (DCF, Residual Income, AEG, LR ROE/RI
      9. Equity Valuations
          Method of Comparables (Ratio Based) (e.g. P/E; M/B; P/S; PEG, etc)
          Discounted Dividends, DCF, CAPM, Residual Income, AEG, LR ROE/RI
          Sensitivity analysis (in body of paper)
      10. Credit Risk Analysis and Z-Scores with discussion
      11. Analyst Recommendation with detailed analysis/justification
      12. Appendix
             Charts (labeled)
             Financial Statements (actual and forecast); Detailed Ratios;
               Detailed valuation model results; Regression Results, etc.
      13. References


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