ACCT30001 2020 SM2 Assignment PDF

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Assignment question and requirements.
Financial statement analysis to one of the four firms....

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ACCT 30001 Financial Accounting Theory Assignment: Firm Valuation Tasks: Your team (1–4 students) has been tasked to value any one of the four listed firms (see below). Specifically, your task is to calculate the fundamental value of an equity share in that firm at the end of the most recent fiscal year, using abnormal earnings model or abnormal NOPAT model. • • • •

Amazon.com, Inc. (AMZN) Zoom Video Communications, Inc. (ZM) Facebook, Inc. (FB) Tesla, Inc. (TSLA) (20 marks)

Notes: 1. You should be able to download the most recent financial statements from the company’s website, Yahoo Finance, etc. 2. Forecast as least three years’ financial position and performance that are necessary for the valuation task. 3. To forecast financial performance such as sales and earnings, you may rely on financial analysts’ consensus forecasts (available from, e.g., Yahoo Finance). 4. Carefully explain all the assumptions in forecasting. 5. To estimate cost of equity capital or WACC, you need to estimate CAPM beta using five-year daily returns prior to the valuation date (for ZM a shorter window is acceptable). 6. Show all the inputs you use in the valuation process and indicate the sources of all inputs. Marks are allocated as follows: • • • •

3 marks --Presentation of valuation inputs (e.g., annual reports, historical data, analyst forecast, etc.) 10 marks -- Forecasting (how reasonable and realistic the assumptions are) 2 marks -- Estimation of CAPM beta, cost of equity, or WACC 5 marks -- Application of valuation model

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