# FIN550 SNHU Macroeconomic Items

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### Question Description

For this milestone, submit a draft of the Macroeconomic Items section of the final project, along with your supporting explanations. Base your calculations on the data provided in 2017 UPS Annual Report Be sure to substantiate your claims.

Submit your calculations on the designated tab of the Final Project Student Workbook and your supporting explanations as a Microsoft Word document.

This milestone will be used in your final project. For additional details, please refer the Milestone Four Guildelines and Rubric document.

***Include References. See three attachments for additional details.***

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Philal
School: Rice University

Kindly receive your work in advance and feel free for edits if need be.... i hope you will respond as soon as possible so that i can have that opportunity to elaborate all i did

Milestone One: Time Value of Money (please fill in YELLOW cells)
Interest Rate

8%
FCF1

Amounts*
Pv*

Total Pv*
*In millions

FCF2

FCF3

\$7,529

\$5,467

\$7,668

6971.30

\$4,687.07

\$6,087.11

26184.32

Pv=FVN/(1+I)^N

PV(I,N,0,FV)

Explanations:

FCF4

FCF5
\$4,968

\$7,034

\$3,651.63

\$4,787.22

FCF (Free Cash Flow) is the net change in cash g
business during a reporting period, minus cash o
expenditures, and dividends during the same pe
the ability of an entity to remain in business.

Note: For this part of the Milestone, please capit
property. Usually Free Cash Flows (FCFs) are use
Flow calculations will be covered later in the cou
the initial Milestone #1 analysis.

Interest Rate (given) - in our scenario we will us
implicit rate, the average rate that lease consum

Flow) is the net change in cash generated by the operations of a
a reporting period, minus cash outlays for working capital, capital
nd dividends during the same period. This is a strong indicator of

art of the Milestone, please capital lease payments under
ly Free Cash Flows (FCFs) are used to calculate NPV. Free Cash
ns will be covered later in the course and thus can’t be used for
tone #1 analysis.

iven) - in our scenario we will use 8% interest rate. This rate is an
e average rate that lease consumer face on the current market.

Milestone Two: Stock Valuation and Bond Issuance (please fill in the YELLOW cells)
PART I: STOCK VALUATION
Dividend from Financial Statements:
Year (fill in
Cash
what year you Div/share (\$)
are using)
2017
2016
2015

3.32
3.12
2.92

Dividend
Yield

Stockholder's
Stock Price
Equity (in millions)

0.59%
0.80%
0.54%

1,030 563.954476
429
390
2,491 540.740741

1. Stock Valuation - The new dividend yield if the company increased its dividend per share by 1.75
Year (fill in
Cash
Dividend
Stockholder's
Stock Price
what year you Div/Share (\$) Yield
Equity (in millions)
are using)
+1.75
2017
5.07
0.90%
1,030 563.954476
2016
4.87
1.25%
429
390
2015
4.67
0.86%
2,491 540.740741
2. The dividend yield if the firm doubled it's outstanding shares
Year (fill in
Cash
Dividend
Stockholder's
Stock Price
what year you Div/Share (\$) Yield
Equity (in millions) are using)
doubled
2017
1.66
0.29%
2,060 563.954476
2016
1.56
0.40%
858
390
2015
1.46
0.27%
4,982 540.740741

3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above
Year (fill in
Cash
Stock Price Return on
what year you Div/Share (\$)
Investment
are using)
+1.75
2017
5.07 563.954476
2016
4.87
390
2015
4.67 540.740741

CALCULATE ROI
1.01% (Dividends + Capital gain)/ Divided
1.01% (D1 + (P1-P0)) / PO

PART II: BOND ISSUANCE
Current Bonds from Financial Statements
Present Value
Periods
Interest
Payments
Future Value

PV
N
I
PMT
FV

(\$2,963)
40
2.9375
0
\$122,001.53

Semi-annual payment: 2036-2016 = 20 years *2 = 40 periods
Interest paid semi-annually: 5.875%/2 = 2.9375%
This bond does not make regular PMTs, assume zero coupon
CALCULATING FV (please see help on the right hand side)

1. The new value of the bond if overall rates in the market increased by 5%
Present Value
Peri...

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Anonymous
Goes above and beyond expectations !

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