代写ACCT6003 Week 5 Weekly Assignment Cost of capital and FCF代写C/C++语言

ACCT6003 Week 5 Weekly Assignment

Cost of capital and FCF

Case study description

You are asked to discover information to estimate the actual cost of debt, the cost of equity, the WACC, and the free cash flow of Vista Group Ltd (VGL) during the financial year 2024. You   will   need   access   to   the   2024   annual   report   of   VGL,   which   is   available   from https://vistagroup.co.nz/investor-centre. To complete the assignment, you will also need to employ the following inputs and assumptions:

•   The CAPM beta of the VGL stock as traded on the ASX is 1.27.

•   The ASX market risk premium during 2024 was on average 5.55%. This is equal to the difference between the expected market return and the average risk-free rate.

•   VGL’s market value of total debt during 2024 was on average NZ$78 million.

On Canvas you can  find an Excel spreadsheet template.  You are required to use this spreadsheet to develop  answers to the questions  described  below.  You are required to submit only the Excel spreadsheet for marking. Do not submit any Word or PDF report.

You are required to document the source and assumptions that you use in the Excel spreadsheet, under the columns entitled  ‘Source,.   Failing to document your source of information will result in penalties. You must  indicate  from  where  exactly  you   have discovered each piece of information, that may be from VGL’s 2024 annual report (give the note number  or the page number)  or from  other legitimate and trustworthy  sources by providing the  URL  links. At the  end  of  each worksheet there  is  also  a  place  to  add  any further ‘Notes’. Under this space document any assumptions that you might need to make to complete the assignment.

Required:

1.   In the Excel worksheet named ‘Q1. Cost of debt’ you are required to estimate the actual cost of debt of VGL during 2024. [2 marks]

2.   In the Excel worksheet named ‘Q2. Cost of equity’ you are required to estimate the cost of equity using the Capital Asset Pricing Model (CAPM) for 2024. [1 mark]

3.   In  the  Excel  worksheet  named  ‘Q3.  WACC’ you are required to  estimate the Weighed Average Cost of Capital (WACC) for 2024 using information from questions 1 and 2, plus any other information that you need to discover. [1 mark]

The formula for the WACC is:

 

where:

•   E is the market value of equity.

•   D is the market value of debt.

•    V=D+E is the market value of the firm.

•   rd  is the cost of debt.

•   re  is the cost of equity.

•   τ  is the statutory corporate tax rate.

4.   In the Excel worksheet named ‘Q4. FCF’ you are required to calculate the Free Cash Flow (FCF) for 2024, using only information reported in the Statement of Cash Flows of VGL’s 2024 annual report. [1 mark]

5.   In the Excel worksheet named  ‘Q5.  FCF Discussion’ and in no more than 150  words explain whether you believe that the  FCF that you calculated in  Q4 is a good  or bad development for VGL. To provide some more background, the FCF of VGL in 2023 was –$10.8 million and in 2022 it was –$1.72 million. [1 mark]