Classy Writers

Classical Writers

Case Study Assignment: Domino’s Pizza Enterprises (DMP)

Case Study Assignment: Domino’s Pizza Enterprises (DMP) In this assignment, you will analyze the corporate governance, cost of capital, capital structure and dividend policy of Domino’s Pizza

Case Study Assignment: Domino’s Pizza Enterprises (DMP)

In this assignment, you will analyze the corporate governance, cost of capital, capital structure and dividend policy of Domino’s Pizza (ticker code: DMP), which is a company listed in the Australian Securities Exchange (ASX).

The submission will comprise of two parts:
(a) Report (word/pdf): discussing corporate governance, cost of capital, optimal capital structure and dividend policy (using the report template).

(b) Spreadsheet (excel): Showing all the calculations relating to cost of capital, capital structure and dividend payout

What tax rate should I use: You should be able to compute the tax rate for the firm from the income statement

Which debt should I use: Use Long-term debt as a measure of the debt or leverage of the company

How to calculate leverage ratio: Unless otherwise stated, you should use market values to estimate the firm’s leverage.

If market values are not available (market value of debt is not provided), then you can use book values.

Can beta be negative: Yes, beta can be negative.

A negative beta means that the stock returns move opposite to that of market returns.

Do I have to read the whole annual report?: No, you only need to read the corporate governance and executive compensation part of the annual report.

What market and risk-free return should I use for CAPM?= Use historical average based on the data provided in the case study (market data)

Risk-free rate: Note that annualized return on the government bond is provided. Since stock and market returns are on a monthly basis, you will have to convert the return (yield) on the bond accordingly.

More so, what should I use as the current-long term Government bond rate in the cost of debt calculator:

Also, you will have to use the latest government bond rate as provided in the market data file. Do not use the rate from any other source.

Lastly, how to calculate stock returns? Calculate stock return based on the stock price provided in the market data file (ignore dividends paid by the company

Attachments

Click Here To Download

Place Order Now

Leave a Reply

Your email address will not be published. Required fields are marked *