Subject: Corporate finance /Capital Budgeting, Cost of Capital and Corporate Actions Length including (the report contains all necessary parts – executive summary, content page, introduction, conclusion, references.
“Choose a publicly traded company, for which they will propose a capital project which will increase the shareholder value. Will also analyse a recent corporate action and its affect on different types of shareholders.” However the company has been chosen its Pfizer and they will increase shareholder value by acquiring Alnylam. The document to this is attached with name “ project idea and wacc”. The report will consist of three main parts: 1. Capital budgeting project proposal. Here the main goal is to be able to identify a project that could bring a positive NPV for the chosen company and be able to identify all the relevant cash flows for the project. The key consideration for this part is the ability to estimate the cash inflows and outflows as a result of implementing the project using the information from similar projects.
2. Calculate the cost of capital for the company and adjust it, if needed, for the capital budgeting project proposed. Using the company’s financial statements and data from sources such as Yahoo Finance, Google Finance and/or Morningstar teams will determine and calculate the weights of all types of capital currently used by the company, calculate the cost of each type of capital determined, and estimate the companies weighted average cost of capital.
3. Combining the outputs from parts 1 and 2, students will analyse the capital budgeting project proposal using various capital budgeting and project analyses techniques and determine its impact on the shareholders’ value. To further analyse how this company generates the value to its shareholders students will identify and analyse one recent corporate action (cash dividends, share repurchases, and rights issue) carried out by the company management.
For this corporate action provide a brief description, reasoning behind it given by management and opinion by analysts, if available, as well as show the market’s reaction using the changes in stock price around this event. Fine to use idea as they have not tried to buy it before. As acquisition, need to understand analym is trade in dollars s, when another company tries to take over, they normally pay premium for control, and cant take all company share in the market, and need to pay 30% above share value for the shares.
