Morton Nyemba C0153bgobgo0414 Fmia Assignment Aug 2014 Mba
London School of Commerce
MODULE TITLE: - FINANCIAL MARKETS AND INVESTMENT ANALYSIS
PROGRAMME: MBA
SEMESTER: 3
ACADEMIC YEAR PERIOD: August-November 2014 Semester
LECTURER SETTING ASSESSMENT: - Dr K V Shenai
DATE ASSESSMENT TO BE COMPLETED AND SUBMITTTED: - 29th October 2014
SUBMISSION METHOD/MODE: - Online via turnitin
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Assessment Type: Individual coursework worth 100 % of the module
Name: Morton Nyemba
Student No: C0153BGOBGO0414
Table of Contents
INTRODUCTION 3
1. Estimation of Market Model for Lloyds 4
Regression Graph 4
Summary Output 5
Regression results interpretation 6
2. Yield Curve 7
(a)What is the yield curve? 7
Shape of the yield curve? 7
Factors that affect the slope of the yield curve 8
(b) Yield curve graph 10
3. Valuation of the shares for Lloyds Company 11
Valuation Methods 12
Earnings based method 12
Asset based method 12
Discounted Cash flow methods i.e. (free cash flow or Dividend valuation method) 13
4. Evaluation of stock value results 14
Asset-based approach 14
References 16
APPENDIX 17
Appendix 1 17
Appendix 2 18
INTRODUCTION Lloyds banking group is a produce of the fourth oldest bank in the United Kingdom which began in 1975 when Lloyds bank was founded. It was formed in 2009 through acquisition of HBOS by Lloyds TSB. Lloyds is a financial institution whose activities include retail banking, commercial banking, corporate banking and insurance (general, life, pensions and investment provisions). Lloyd’s operations extend to overseas as they have operations in the US, Europe, Asia and the Middle East.
Lloyds is listed on both the London Stock Exchange as well as the New York Stock exchange and is among the largest companies within FTSE 100. As of 4th March 2014 its position was 7th largest on the London Stock Exchange as it had a market capitalisation of approximately £57.7 billion. In the same month it had a
MODULE TITLE: - FINANCIAL MARKETS AND INVESTMENT ANALYSIS
PROGRAMME: MBA
SEMESTER: 3
ACADEMIC YEAR PERIOD: August-November 2014 Semester
LECTURER SETTING ASSESSMENT: - Dr K V Shenai
DATE ASSESSMENT TO BE COMPLETED AND SUBMITTTED: - 29th October 2014
SUBMISSION METHOD/MODE: - Online via turnitin
----------------------------------------------------------------------------------------------------------------
Assessment Type: Individual coursework worth 100 % of the module
Name: Morton Nyemba
Student No: C0153BGOBGO0414
Table of Contents
INTRODUCTION 3
1. Estimation of Market Model for Lloyds 4
Regression Graph 4
Summary Output 5
Regression results interpretation 6
2. Yield Curve 7
(a)What is the yield curve? 7
Shape of the yield curve? 7
Factors that affect the slope of the yield curve 8
(b) Yield curve graph 10
3. Valuation of the shares for Lloyds Company 11
Valuation Methods 12
Earnings based method 12
Asset based method 12
Discounted Cash flow methods i.e. (free cash flow or Dividend valuation method) 13
4. Evaluation of stock value results 14
Asset-based approach 14
References 16
APPENDIX 17
Appendix 1 17
Appendix 2 18
INTRODUCTION Lloyds banking group is a produce of the fourth oldest bank in the United Kingdom which began in 1975 when Lloyds bank was founded. It was formed in 2009 through acquisition of HBOS by Lloyds TSB. Lloyds is a financial institution whose activities include retail banking, commercial banking, corporate banking and insurance (general, life, pensions and investment provisions). Lloyd’s operations extend to overseas as they have operations in the US, Europe, Asia and the Middle East.
Lloyds is listed on both the London Stock Exchange as well as the New York Stock exchange and is among the largest companies within FTSE 100. As of 4th March 2014 its position was 7th largest on the London Stock Exchange as it had a market capitalisation of approximately £57.7 billion. In the same month it had a
References: PIMCO, 2004. Pacific Investment Management. [Online] Available at: http://faculty.baruch.cuny.edu/ryao/fin3710/PIMCO_YIELD_CURVE_PRIMER.pdf Bodie, Z., Kane, A. & Marcus, A. J., 2008. Investments. 7th ed. s.l.:s.n. DAMODARAN, A., 2002. Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. New York: John Wiley & Sons. Deev, O., 2013. METHODS OF BANK VALUATION : A CRITICAL OVERVIEW. Masaryk University, Faculty of Economics and Administration, Department of Finance. IJM, 2013. VALUING COMPANIES BY DISCOUNTED CASH FLOWS: 10METHODS AND 1 SOLUTION. International Journal of management, 4(2). Lloyds Banking Group, 2014. GROUP OVERVIEW. [Online] Available at: www.lloydsbankinggroup.com