Apple Company Part One: Business Overview. Accounting, Finance, SPSS Case Study

My class is a FIN7940 Master class. It takes 1 page. My part is responsible for Part1. Trouble looking for a better writer because the introduction is quite simple

Guidelines for Case 1: Case Study on Corporate Governance and Stock Valuation I. Case Objective: The objective of this case is to understand corporate governance structure in public corporations, and practice stock valuation methods we learnt in class. You should be aware that the reality is much more complicated than the theory, so please be prepared to deal with any new knowledge through self-learning. Please select ONE publicly listed NON-FINANCIAL firm in any stock market, and then download its annual report in ONE year. You can freely choose which firm to analyze, but I suggest you selecting firms with relatively simple business structure, such as retail firms. Also, there is no requirement for the year of annual reports, and they could be the most recent annual reports, or annual reports in 2000 or any other year. Just select one year as your main reference, and use other years as supporting resources if needed. Also, if necessary, please specify all your assumptions to simply the analyses. II. Data sources: Annual reports and other disclosure filings can be found in the stock exchanges websites, corporate official websites or major financial websites. Here are some links for major stock markets, and you could find other relevant links on Google. US market--U.S. Securities Regulatory Commission (SEC): Annual reports are 10-K filings (or 20F filings for some foreign companies), https://www(dot)sec(dot)gov/edgar/searchedgar/companysearch.html. HK SAR--Hong Kong Stock Exchange: https://www(dot)hkexnews(dot)hk/. See “Listed Company PublicationsView Publications by Company”. Mainland China--China Securities Regulatory Commission: Shanghaihttp://www(dot)csrc(dot)gov(dot)cn/pub/newsite/xxpl/sjspl/; Shenzhenhttp://www(dot)csrc(dot)gov(dot)cn/pub/newsite/xxpl/shjspl/. The quotes of individual stocks and stock indexes can be found in major financial websites, such as Bloomberg, Yahoo Finance, Wall Street Journal, etc. The data about macro-economic indicators such as GDP or fixedincome interest rates can also be found through the above websites, as well as the World Bank, U.S. Fed, etc. III. What you need to submit: 1. A written report. This written report should be a well-structured analysis addressing the problems in Section IV. The maximum is 10 pages, excluding the reference list. The reference list should include link(s) of major annual report(s), links for stocks and indexes information, any new articles or academic papers cited in your written report. This written report accounts for 10 points in total. 2. Presentation slides. Each group is required to conduct a 30-minute presentation showing how you address all the problems in Section IV. All group members are expected to contribute some time during the presentations, and will be graded separately based on individual performance. For ease of grading, please submit your presentation slides and a name sheet listed by the order of presenting before class. Presentation accounts for 10 points in total. 3. Peer evaluation. Each member in a group should submit a grading sheet of all other members in the same group. Please fill out the grading form in Section V, and submit it to me with confidential cover during the presentation session. The within-group average will be your points for this part, which accounts for 10 points in total. IV. Problems to Address in the Case Study: Part One: Business Overview. Please describe the business background of the firm you selected, such as firm information (e.g., firm history, firm industry, main business/products/services, annual revenue, total assets, common equity, etc.) and stock information (e.g., number of shares outstanding, stock price performance in past year, the most recent close price or market capitalization, etc.). Part Two: Corporate Governance. Please describe the firm’s ownership structure, such as major institutional and/or individual shareholders, shareholders with different voting rights, recent major changes in ownership structure. The objective is to understand how cashflow and voting rights are distributed among shareholders, whether the ownership is diversified or concentrated, whether the founder or top managers have superior control of the firm. Please list all the directors on the board and their roles. The objective is to evaluate the board independence, and whether you think the board structure would be effective in terms of monitoring and offering advices. Please describe the major compensation plans for top executives (CEO, CFO), such as stock options, fixed salary or performance-based cash bonus. The objective is to evaluate whether you think the compensation structure can mitigate the agency problem. Part Three: Stock Valuation. The objective of this part is to estimate stock price per share based on the models we learnt in class. To make the process easier, here are the suggested steps: First, assume the firm will exist forever, and hence use an infinite timeline. Meanwhile, choose at least three different discount rates for estimation, such as 5%, 10%, 15%, or other numbers you prefer. Second, when predicting future cash flows to shareholders, you have two options. One is to use free cash flows from the Cash Flow Statements, and the other is to use dividend payments. The choice between these two depends on your own justification. Third, for each discount rate, choose a stock valuation model we learnt to estimate the present value of future cash flows or dividends. You can assume a constant growth rate of future cash flows based on a historical average growth rate, or you can also use the two-stage model. Again, the choice depends on your own justification. Fourth, divide the present value in step four by the number of shares outstanding, and this gives you an estimate of stock price per share. You can receive a group of estimates based on different discount rates. Fifth, compare your estimates with the actual stock price in the market. Evaluate whether it is worthwhile to buy the stock. Part Four: Conclusions. Summarize your findings: Evaluate whether you think the governance structure is good or not; and evaluate whether the stock price is high or not. Also, point out any interesting knowledge beyond the textbook you learnt through the case, or anything else you want to share with classmates.