Description
FIN 390 WEEK 7 FINAL COURSE PROJECT
Milestones and Final Project
- Milestone 1: Company Background: (20 points) This section should include what industry the firm is in, its products, its competitors, and the stated main reason for needing capital (to fund receivables, capacity expansion, retire older debt, etc.).
- Milestone 2: Balance Sheets: (20 points) What did the balance sheet look like in the quarter just prior to issuing the bonds? Include both a copy from before the issue and after the issue. Calculate at least five of the ratios shown in the Moody’s Bond Rating Chart contained in the Week 2 Lesson both before and after the bonds were issued, and discuss why you think they are important to your report.
- Milestone 3: Trends in YTM and Price: (20 points) At what price and YTM was the initial offering sold? Tabulate the price and YTM of the issue at the end of each calendar quarter for the last six quarters. Then, plot the tabulated values to visualize the trends in YTM and prices.
- Milestone 4: Purpose of the Offering and Leverage: (20 points) What was the planned use of the funds raised? If you can’t find a specific discussion about that, then use your judgment as to why you think the funds were needed and explain your reasoning. Calculate the financial leverage before and after the offering.
- Milestone 5: Rate of Return: (20 points) If you were one of the original investors in this issue and you had invested $10,000, what would your total return be if you sold the securities at today’s market price? Compute the duration of the bond and its convexity currently. Add a brief discussion about your calculations.
- Milestone 6: Comparisons: (20 points) Identify and compare pre-offering EPS and total equity $ to the most current values. Compute the firm’s current WACC assuming the total debt of the firm is in the issue that you analyzed. This means that if the company has more than one debt issue outstanding with a total face value of $X million and your chosen issue involves $Y million, then assume that all $X million is in your issue. This will simplify the calculations without diminishing learning value. Discuss at least three overall conclusions about this offering as a result of your research.
- Final Project:(210 points) Organize your project with a title page, table of contents, and reference list. Please construct a comprehensive introduction that lays out your project. In your conclusion, please recap your analysis so that a reader can draw upon your expertise in order to make an educated investment decision. This is the section to draw together all that you have researched and analyzed. Assemble and revise, if necessary, all of your milestone work to incorporate into the Final Project. The chapters should flow from one to another to ensure continuity. The reader should gain valuable information and conclusions from your work. After this section, please give your opinion about the value of this project to your overall learning experience in this course. Constructive comments, both positive and negative, are appreciated. Discuss at least two characteristics about this project that enhanced your learning experience. Please edit your report so that it is something that makes you proud.
Milestone Grading Rubrics
Fixed-Income Security Milestone Rubrics
| Week | Points | Full Credit | 3/4 Credit | 1/2 Credit | 1/4 Credit |
|---|---|---|---|---|---|
| 1 | 20 | Thorough description with all requirements | All elements included, but lacks some depth; clear reason for funding | Some elements included, but lacks depth; unclear reason for funding | Minimal description; most elements missing; no reason for funding |
| 2 | 20 | Pre and post balance sheets; pre and post D/E and ROE ratios | Balance sheets included; three-fourths ratios shown | Balance sheet included; only half the ratios shown | Missing one or more balance sheet(s); no ROE shown |
| 3 | 20 | Trends in YTM and price | All included, except 18-month trend incomplete | Partial trends included | No indication of the trends |
| 4 | 20 | Found and commented on purpose of the offering; computed financial leverage before and after offering | Found purpose of offering and leverage, but incomplete | Purpose or leverage missing | Some information provided without explanation |
| 5 | 20 | Computed total return, duration, and convexity, and discussed | All calculations shown, interest or dividends shown, but TVM improperly applied | Calculations shown and TVM applied improperly | TVM not used to calculate total return; no calculations shown |
| 6 | 20 | Compared EPS, total equity preoffering to most current; computed WACC and discussed your thoughts about them | Three conclusions reached, but with weak justifications; EPS and ROE determined | Conclusions shown but without justification; calculations incomplete | No conclusions or calculations shown |
| Total Points 120 | |||||
Final Project Grading Rubric
| Week | Points | Full Credit | 3/4 Credit | 1/2 Credit | 1/4 Credit |
|---|---|---|---|---|---|
| 1 | 25 | Thorough description with all requirements | All elements included, but lacks some depth; clear reason for funding | Some elements included, but lacks depth; unclear reason for funding | Minimal description; most elements missing; no reason for funding |
| 2 | 25 | Pre and post balance sheets; pre and post D/E and ROE ratios | Balance sheets included; three fourths ratios shown | Balance sheet included; only half the ratios shown | Missing one or more balance sheet(s); no ROE shown |
| 3 | 25 | Trends in YTM and price | All included, except 18-month trend incomplete | Partial trends included | No indication of the trends |
| 4 | 25 | Found and commented on purpose of the offering; computed financial leverage before and after offering | Found purpose of offering and leverage, but incomplete | Purpose or leverage missing | Some information provided without explanation |
| 5 | 25 | Computed total return, duration, and convexity, and discussed | All calculations shown, interest or dividends shown, but TVM improperly applied | Calculations shown and TVM applied improperly | TVM not used to calculate total return; no calculations shown |
| 6 | 25 | Compared EPS, total equity preoffering to most current; computed WACC and discussed your thoughts about them | Three conclusions reached, but with weak justifications EPS and ROE determined | Conclusions shown but without justification; calculations incomplete | No conclusions or calculations shown |
| 7 | 60 | All six milestone projects are scholarly melded into a comprehensive document. All references are cited within the work: the discussion is grammatically sound. The introduction, conclusion, and student review are thorough, analytical, and perfected. A recommendation and justification is thoughtful and reasonable. The reader has valuable insight into the company and its potential. The document is well organized and flows smoothly from section to section. | Milestones are assembled and tied together. There are very few citation errors. There are some minor grammatical errors. The introduction and conclusion are informative but do not present a comprehensive picture of the organization. The recommendation and justification is present, but not briefly discussed. The reader does benefit from the analysis, but it is not complete. The document sections flow somewhat transparently from section to section. | Most of the milestones have been revised and assembled into the document, and there are some continuity errors. There are some citation errors and grammatical errors. Introduction and conclusion are brief and not comprehensive. The construction does not meet requirements. The recommendation and justification are weak and require more thought. The reader obtains some information from the research. | Milestone work is just assembled and not tied together; no continuity. There are many citations and multiple grammatical errors. Introduction and conclusion are brief and do not contain much information. The recommendation and justification are not present.The reader does not gain much value from this document. The sections do not appear to be connected; they are just copied from the milestones. |
| Total Points 210 | |||||
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