Calculate the stock price for your selected company using the constant growth formula and the low-end dividend growth rate you determined in Part 1.

Create a table that illustrates the annual dividends per share paid by your selected company over the past 10 years. If the company has not paid dividends for 10 years, include as many years as available.
Calculate the growth in annual dividends per share each year and include this annual growth rate in your table.
To find the dividends your company has paid in the past 10 years, review the BUS401 |Picking a Company that Pays Dividends (Links to an external site.) video from Week 1.
Calculate the average dividend growth rate over the following periods:
the most recent 10 years,
the most recent 5 years, and
the most recent 3 years.
Summarize the trend in the dividend growth rates.
Have the dividend growth rates increased or decreased? By how much? Has the increase or decrease been steady or varied from year to year?
Determine two distinct estimates of the future dividend growth rate for this company: a high-end growth rate and a low-end growth rate. You are to choose these growth rates based on what is reasonable from the data you have on the company’s dividend growth in prior years, as presented in your table. The two future dividend growth rates can be any of following:
the most recent year growth rate;
the average growth rate over the 10-year period;
the average growth rate over the most recent 5 years;
the average growth rate of the most recent 3 years; or
a growth rate you select that is reasonable, given the 10-year, 5-year, and 3-year averages, as well as the recent year growth rates.
NOTE: Both dividend growth rates must be lower than the required rate of return used in the constant growth formula. See Part 2 below for the required rate of return to use in the constant growth formula.
Justify the determined the high-end dividend growth rate and low-end dividend growth rates for your company. In your justification, provide a least two financial facts from your Week 1 and Week 2 assignments to support your determination.
Part 2: Preliminary Valuation: (two to three paragraphs)
Calculate the stock price for your selected company using the constant growth formula and the low-end dividend growth rate you determined in Part 1. Show all calculations for this estimated stock price using the low-end dividend growth rate.
For the required rate of return (r), use the following assumptions:
For a large capitalization company (greater than $10.0 billion in market capitalization) use 10.0%.
For a mid-cap company (between $2.0 billion and $10.0 billion in market capitalization) use 12.0%.
For a small-cap company (less than $2.0 billion in market capitalization) use 15.0%.
Show your calculations.
In a similar manner, calculate another estimate of the stock price for your selected company using the constant growth formula and the high-end dividend growth rate.
Use the same assumptions for the required rate of return (r) that you used for the low-end stock price, other than using the high-end dividend growth rate.
Show your calculations.
Compare each of the two stock prices you just calculated to the current stock price per share of the company.
State whether each constant growth stock price (low-end and high-end) is above or below the current price.
State whether each constant growth stock price (low-end and high-end) indicates if the stock price is currently under-valued or over-valued in the market.
Determine your concluded stock value, based on the two calculations using the constant growth formula.
Justify your conclusion of value for your stock, using either the high-end stock price or the low-end stock price from the constant growth formula. Include least two financial facts from your Week 1 and Week 2 analyses.

The Section 3: Dividend Analysis and Preliminary Valuation paper
Must be three to four double-spaced pages in length including any tables or calculations (but not including title and references pages) and formatted according to APA Style (Links to an external site.) as outlined in the Writing Center’s APA Formatting for Microsoft Word (Links to an external site.) resource).

Critically evaluate this strategy and state your findings (quantitative and qualitative) as to the expected increase in contribution (if any) and discuss any issues (in particular in regard to overtime working) that could arise and would need to be resolved.

Question 1
Gemini plc manufactures four products using the same machinery. The following details relate to
its products:
Product A £
per unit
Product B £
per unit
Product C
£ per unit
Product D
£ per unit
Selling price 28 34 45 46
Direct material 6 7 9 7
Direct labour 5 5 10 10
Variable overhead 3 3 6 6
Fixed overhead * 8 8 16 16
Profit 6 11 4 7
Labour hours 1 1 2 2
Machine hours 4 3 4 5
Units Units Units Units
Maximum demand per week 200 180 250 100
*Absorbed based on budgeted labour hours of 1000 per week.
There is a maximum of 2000 machine hours available per week.
Requirement:
(a) Determine the production plan which will maximize the weekly profit of Gemini plc and
prepare a profit statement showing the profit your plan will yield.
25 marks
(b) The marketing director of Gemini plc is concerned at the company’s inability to meet the
quantity demanded by its customers. One consideration to overcome this is to increase the
number of hours worked using the existing machinery by working overtime. Such overtime
would be paid at a premium of 50% above normal labour rates, and variable overhead costs
would be expected to increase in proportion to labour costs.
Requirement:
Critically evaluate this strategy and state your findings (quantitative and qualitative) as to
the expected increase in contribution (if any) and discuss any issues (in particular in regard
to overtime working) that could arise and would need to be resolved.
25 marks Total 50 marks
Question 2
Companies have found that offering discounts to customers in return for early payment can
be counterproductive in terms of the resulting adverse effect on profitability. This is when the
reduction in profitability outweighs any marginal improvements gained from the benefit of a
reduction in the working capital requirement.
a) Given the above critically discuss the alternative measures to offering discounts to
customers that could prove more effective in reducing the working capital
requirement for a company with only minimal potential reductions in profitability.
25 marks
b) Critically evaluate the methods that can be adopted to manage and achieve the
efficient control of inventories and gain the resulting benefits for improving cashflow
and ultimately profit in a business.
25 marks Total 50 marks
Question 3
Many organisations use transfer pricing when transferring products between different
divisions of the same organisation. You are required to critically discuss the advantages and
disadvantages of two of the following methods:
1) Market based transfer prices;
2) Full cost transfer prices;
3) Marginal/variable cost transfer prices; 4) Cost-plus a mark-up transfer prices; and
5) Negotiated transfer prices.
Choose any two of the above five transfer pricing methods:
(a) The first chosen method 25 marks
(b) The second chosen method 25 marks Total 50 marks
The report should include critical evaluation of the models and concepts proposed
outlining their merits and limitations. You may incorporate logical assumptions with regard
to the company and use numerical examples to illustrate the models and concepts that you
propose to adop

Analyze how your outpatient service will add value for patients and improve the financial viability of the institution.

Evaluating Feasibility
The concept of a feasibility study is central to viability, the “worth to the effort” ratio, and return on investment (ROI). What needs to be taken into consideration to create a feasibility study (e.g., human resources, community needs, and technological advances, federal and state regulatory issues)? Within this section, you will research and design an economical health care service that is responsive to a given market. This research stems from understanding your target population and present need in health services. Furthermore, as you have seen from the Daniels and Dickson (1990) article, you must appraise your human resources, capital investment, and how your effort will yield a return on investment from a facilities perspective as well as the tangible greater good of providing healthcare to a community.

Strategic Effect
Analyze the role of public policy with regard to your project. What policies and processes should be in place to create an effective program? How will you measure the effectiveness of your program and your provision of health care services? Develop a microeconomic model that is responsive to the specific health care service demands of your target population. For example, the current trend of the medical home model, which allows for the coordination of care, allows for better communication among service providers as well as convenience for patients. Is the population a market priority? How does your program serve a need for your target population?

Market Analysis
Within this section you will identify the population demographics, who your competitors are, and whether or not a real need for the services you are proposing exists in the community. As you examine the demographic and population needs using Census data and other reliable sources, you must also consider what competitors, if any, exist in the present climate. This requires an evaluation of the present socioeconomic and cultural trends influencing how people make decisions in health care. In addition, in this analysis you will need to compare and contrast economic challenges and incentives among health care’s organization models. This comparison requires an understanding of past challenges and incentives that other organizations have implemented.

Financial Analysis
This section includes the revenue, expenses, and net income. Compare and contrast economic challenges and incentives by finding and describing multiple sources of public and private funding (e.g., grants, donations, awards, special projects) for this project. Include a reference list for your funding sources that is formatted in APA as outlined in the Writing Center. Next, identify the funding constraints for each source. Include limitations of monies awarded, timing issues, fitting the needs of the funding sources, difficulties of connecting with private funders, etc. Finally, specify the internal ramifications of moving forward using SWOT analysis. What are the fixed and variable costs associated with your project? What are the annual maintenance and operation costs? Elaborate on how you arrived at your sensitivity analysis conclusions.

Operations Performance
This section examines the incremental effect of how your proposed service will impact all aspects of health services. This portion of the study explores how the statistical data you have researched affects the proposed service in terms of efficiency and value. This can be difficult to measure initially. However, through incremental and ongoing evaluation of operations, you can begin to see what constitutes the best performance in this instance and how it serves the target population. In this section, you will further illustrate the incentives and challenges faced by a health organization and communicate the relevance of economics within the U.S. health care system as it pertains to your proposed services.

Inpatient
If your proposed study has an inpatient component, this section will analyze on volume of patients, types of payers, and how utilization rates impact your proposed study. In addition, you will further explain how your new inpatient service will add value for patients and improve the financial viability of the institution. This section will require you to use both qualitative and quantitative data to justify the plan. Hospitals operate in terms of how many beds are occupied relative to how many are empty. Most CEOs want to see that a unit is running at near full capacity and that volume is increasing year to year. Analyze how your proposal will meet these demands by explaining the data you have collected and predicting potential financial outcomes. Finally, evaluate and explain how value-based care will impact your ability to maintain margins within this newly proposed service.

Outpatient
If your proposed study has an outpatient component, examine how admissions, revenue, and workflow of staff will improve the efficiency of your proposed service. Analyze how your outpatient service will add value for patients and improve the financial viability of the institution. Justify your plan with appropriate data. As stated in the inpatient section, the content here applies much the same way. However, the caveat for outpatient services lies in the ambulatory setting. This aspect should be most interesting under conditions created by the Affordable Care Act. The new paradigm shift will be toward more preventative, primary, and outpatient care settings to reduce the numbers of patients being admitted to hospitals. Please explain how your proposal takes these conditions into consideration. In this section, you will further compare and contrast economic challenges and incentives among health care’s organization models in an outpatient setting. You will also further augment your design in an economic framework that is responsive to your market.

Outlook
This section examines future implications of your proposed services and how they will impact the future health outcomes of the community and financial health of the services being provided. Analyze economic theories that are germane to the provision of your proposed health services. What adjustments might you need to make in terms of what the “unintended consequences” may be? For example, Baylor Hospital in Houston proposed and spent 250 million to create a brand new hospital that currently stands empty because it was built during the U.S. economic downturn, the loan was no longer able to finance the construction, and the initial examination of its necessity did not play out as expected. Provide conclusions and implications of how your feasibility study fits within the larger context of the system of services currently being provided. How do they work with one another within the larger health care system?

Finally, evaluate how your study will respond to market and design models that impact the community based on current regulatory and market needs.