I am in need of guidance concerning a paper. I have the requirement
to develop a Capital Structure Analysis Report on ConocoPhillips.
(Ticker COP) The specific requirements of the paper are outlined
below.
Thanks in advance...
a. Calculate the cost of capital using CAPM and use the dividend
growth model to calculate estimated stock value and compare the
results to the market value.
b. Calculate current Weighted Average Cost of Capital and determine
the appropriateness of the debt and equity distribution. E.g. How
much debt/stock does the company have? Should it have more or less?
Why?
c. Is the structure of debt (i.e., convertible bonds, callable,
callable-convertibles, floating rate, dual currency, etc) reasonable?
Is the claims structure too complex or simple? Are there risk
management or hedging dimensions to the company?s financial structure?
Are they reasonable and adequate?
d. Is the structure of stock reasonable? What is the impact of the
structure on the EPS? What is the impact of the capital structure has
on the stock valuation?
e. Make recommendations to buy, or sell the stocks.
f. References and bibliography |