1. { Case Study Demo Steps to Complete your Case Study

2.  You have all completed this step  For this demo I will select Exxon Mobil Corp 1. Pick your company

3.  Tell the class a few things about the company:  Short history of company  What does the company make, product lines  Who is the top management, how many employees and locations  Any recent news stories worth noting  Anything else you think someone should know about the company 2. Company Description

4. CompanyMorningstar Page

5. Financial Statements Under “Financials”

6. Ratios

7. CAPM r = R risk free + β (R Market – R risk free ) ‘XOM’ r = 0.03 + 0.86 (0.10 – 0.03) Required return = 9.02%

8. DUPONT

9. Weighted Average Cost of Capital WACC= w debt x k debt ) + (w common x k common ) + (w preferred x k preferred ) W = weight in the company K = cost of financing Debt = long & Short term debt Common = total outstanding common stock Preferred = total outstanding preferred stock

10. Weighted Average Cost of Capital ‘XOM’ The Total of Capital Debt + Common Stock + Preferred Stock = $7,928 (Long Term Debt) +$3,653 (Short Term Debt) +$165,863 (Common Stock) +$0 (Preferred Stock) = $177,444

11. Weighted Average Cost of Capital ‘XOM’ Weighted Average Debt Total Debt divided Total Capital ($7,928+$3653)/$177,444 = 6.52%

12. Weighted Average Cost of Capital ‘XOM’ Weighted Average Common Stock Common Stock divided Total Capital $165,863/$177,444 = 93.47%

13. Weighted Average Cost of Capital ‘XOM’ Weighted Average Preferred Stock Preferred Stock divided Total Capital $0/$177,444 = 0.0%

14. Weighted Average Cost of Capital ‘XOM’ Cost of Debt Interest Expense (Income Statement) divided by Long-Term Debt (Balance Sheet) Interest Expense = $244 Long Term Debt = $7928 $244/$7928= 3.0%

15. Weighted Average Cost of Capital Cost of Common Stock CAPM; r = R risk free + β (R Market – R risk free ) ‘XOM’ r = 0.03 + 0.86 (0.10 – 0.03) Required return = 9.02% Cost of Common Stock = 9.02%

16. Weighted Average Cost of Capital WACC= (w debt x k debt ) + (w common x k common ) + (w preferred x k preferred ) WACC = (0.0653 x 0.0308) + (0.9347 x 0.0902) + (0.0 x 0.0) (0.00201) + (0.0843) + (0)= 8.632%

17. Stock Performance

18.  How has the stock performed vs it’s industry?  Versus the S&P 500?  Does it follow the market or does it do it’s own thing?  Would you invest your money in it?

19. Dividend Policy Cash Flow Statement

20. Dividend Yield Dividend divided by Net Income

21.  Inventory Turnover + Receivables Turnover– Payables Period  Look under Key Ratios Cash Conversion Cycle

22.  How is the company doing?  Was there anything that surprised you in you research?  Excess debt, dividends, declining assets, increasing liabilities  Do you see this company growing or declining in market share?  Would you invest your money into the company and why?  The presentation can be split 50% explaining the company and 50% going over your conclusion, should be between 5-10 minutes. Conclusion & Presentation