Description
Prompt
Provide an explanation of the impact of external factors on the financial position of your selected company. Use the designated tab in the Final Project Excel Workbook (which is linked to in your course) to demonstrate the implications of interest rate changes on at least one of the calculations you performed in Milestone One.
Specifically, the following critical elements must be addressed:
Macroeconomic Items: The CEO of your selected company is convinced that financial analysis should hinge only on what is happening internally within the company. Convince him otherwise based on the following:
Analyze the implications of interest rate changes on any of the calculations you performed. Be sure to substantiate your claims.
How might an issue (negative or positive) within the overall stock market impact the company’s stock valuation numbers, other financial variables, or its overall portfolio management? Be sure your response is supported by evidence through research, references, and citations using proper APA style.
Analyze the impact of any external factor (i.e., external to the company) discussed throughout the course on the company’s financial position. Be sure to justify your reasoning through research, references, and citations using proper APA style.
What to Submit
Your paper must be submitted as a 2- to 3-page Microsoft Word document, not including your calculations, which should be completed in the Final Project Excel Workbook. Use double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style
Unformatted Attachment Preview
Milestone Four: Interest Rate Implication (fill in YELLOW cells)
1. Original Scenario From Milestone 1—Time Value of Money Using 8%
Current Market Interest Rate at 8%
Interest Rate
8.00%
Years
Amounts*
$
–
$
–
$
–
Pv*
$
–
$
–
$
–
Total Pv*
*In millions
$
–
2. Change in Interest Rate and Its Implications
Lower Current Market Interest Rate to 4%
Interest Rate
4.00%
Years
Amounts*
$
–
$
–
$
–
Pv*
$
–
$
–
$
–
Total Pv*
$
–
*In millions
3. Change in Interest Rate and Its Implications
3. Increase Current market Interest Rate to 12%
Interest Rate
12.00%
Years
Amounts*
$
–
$
–
$
–
Pv*
$
–
$
–
$
–
Total Pv*
*In millions
$
–
Instructions and Explanations
We will use your selected company’s free cash flows for Milestone Four analysis.
(Note that the initial interest rate and rate changes for this Milestone are different than those used in Milesto
Three scenarios will be analyzed:
1. Current Market Interest Rate at 8%
2. Lower Current Market Interest Rate to 4%
3. Increase Current market Interest Rate to 12%
Once you have completed these calculations, proceed to write your written analysis.
those used in Milestone One.)
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