The information on bonds can be found on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Symbol, and click SHOW RESULTS.
Another useful website on bond information is https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.
- Copy the bond information of two bonds issued by DISNEY that contain the Last Price. You can create a screenshot with the bond information and paste it in the project.
- What were the last prices of the bonds (listed in the Last Sale column)? Assume that par value of the bond is $1,000. How much the investor will pay for the bond if he/she purchased the bond at the Price listed in the Last Sale column. Show your work in your project.
- Assume that par value of the bond is $1,000. Calculate the annual coupon interest payments. Show your work in your project.
- Assume that par value of the bond is $1,000. Calculate the current yield of the bonds. Show your work in your project.
- How much is the YTM listed on the website of the bonds (in the Last Sale column – Yield)? (No calculations are required for this question).
- Describe in a page of the analysis of the bonds. In your analysis you should answer the following questions. Please explain your answer to each question.
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- If you are going to buy a bond issued by DISNEY, which bond would you choose? Why?
- Are these bonds callable? If the bonds that you chose are callable (non-callable), will it change your decision to buy them?
- What is the bond’s rating? What important information does this analysis provide?
- If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose?
- In Research Project Part 2 you analyzed debt/equity and financial leverage ratios. How do these ratios support your decision to buy these bonds or not?
-3- Collect and evaluate the data about stock performance of the assigned company for the last one year. (Totally 30% of the project grade).
a) Collect the market ratios for the company for the last 3 years (2020, 2021, 2022) and its major competitor for the last year. Present the market ratios as the table(s) in your project.
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- Price/Earnings ratio
- Price/Cash Flow ratio
- Price/Book ratio
- Price/Forward Earnings
- PEG ratio
- Dividends per share
These ratios are available on www.morningstar.com > type the stock symbol in the Search window to get into the company’s page. Click on Valuation.
Dividends per share are available under tab Dividends. If you use published ratios you must indicate that and cite their source.
b) Write a couple pages of analysis of the market ratio results that you found. Compare the market ratio results against the industry or main competitor. In your report please answer the question: Are the common stockholders receiving an adequate return on their investment? In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.
-4- Now look the results of your analysis from the point of DISNEYS management. Develop a specific recommendation, with supporting rationale for the COMPANY’S management – Think about the financial strategy of the company, how to best balance THE COMPANY’S financial leverage to optimize shareholder wealth going forward taking into consideration the company’s current market position, credit rating, dividend policy, etc. (15% of the project grade).
-5- Reflection – the students should write a paragraph in their own words reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace or everyday life. (5% of the project grade).