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Running head: M8A5 MILESTONE III1Final Project Submission – Financial AnalysisBy: Katiuska NavarroBusiness 505 FinanceProfessor: Dr. Cory KanthMarch 7, 2021
M8A5 MILESTONE III2Table of ContentsTable of Contents.............................................................................................................................2Introduction.....................................................................................................................................3Financial Analysis............................................................................................................................3Conclusion.......................................................................................................................................6References.......................................................................................................................................7
M8A5 MILESTONE III3Introduction The multination pharmaceutical company Bayer have announced a bid of $62B proposal to buy the large United States seed company, Monsanto Corporation. Since the announcement, the sales of Bayer have increase and Monsanto shares have increased. As the Chief Financial Officer of Monsanto, I need to evaluate the current financial position of the company by using the ratio, time and trend analysis. This can help us determine if the offer presented will benefit the shareholders. The weighted average cost of capital (WACC) and expected firm growth rate is also used to see the present value and adjusted cash flow one year from today. The proposal would be considered if the value of the shareholder show an increase and profitable for the company. Monsanto have considered an alternative proposal by expanding their operation to pesticide production, which can bring a yield increase in sales of $3.95M. The increase in fixed asset would equal to 70% of this increase in sales and cost of sale is 20% of sales. The company will issue dividends at a rate of 1.98% net sales and a firm’s retention ratio of 98.2%. With a current projected sale of $15,239,000, Monsanto wishes to retain current dividend and not sell additional equities. The proposal is evaluated using the return on asset and return on equity to

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