Birmingham School of Commerce
COMPONENT TITLE: -- FINANCIAL MARKETS AND EXPENDITURE ANALYSIS
ACADEMICS YEAR PERIOD: August-November 2014 Semester
LECTURER SETTING EVALUATION: - Dr K Versus Shenai
DAY ASSESSMENT TO BE COMPLETED AND SUBMITTTED: -- 29th Oct 2014 DISTRIBUTION METHOD/MODE: - Online by way of turnitin
---------------------------------------------------------------------------------------------------------------- Assessment Type: Individual homework worth 100 % from the module Identity: Morton Nyemba
College student No: C0153BGOBGO0414
Table of Contents
1 . Estimation of Market Unit for Lloyds4
Regression results interpretation6
2 . Yield Curve7
(a)What is definitely the yield curve? 7
Shape of the produce curve? 7
Factors that affect the slope of the yield curve8
(b) Yield competition graph10
several. Valuation with the shares pertaining to Lloyds Company11
Earnings centered method12
Property based method12
Discounted Earnings methods i actually. e. (free cash flow or Dividend value method)13 4. Evaluation of stock benefit results14
Lloyds banking group is known as a produce of the fourth oldest bank in the United Kingdom which commenced in 75 when Lloyds bank begun. It was produced in 2009 through acquisition of HBOS by Lloyds TSB. Lloyds is a loan company whose activities include retail banking, industrial banking, company banking and insurance (general, life, pensions and investment provisions). Lloyd's operations prolong to offshore as they have got operations in america, Europe, Asia and the Middle section East. Lloyds is listed about both the Birmingham Stock Exchange plus the New York Stock exchange and it is among the most significant companies within just FTSE 90. As of 4th March 2014 its position was 7th major on the London, uk Stock Exchange mainly because it had a market capitalisation of around ВЈ57. 7 billion. Inside the same month it had a capitalisation of $34. forty-five billon within the New York Stock exchange. HM Treasury organised a 24. 9% shareholding through UK Financial Opportunities. (Lloyds Financial Group, 2014) Below is actually a graph exhibiting Lloyds functionality on the London, uk Stock Exchange and also showing efficiency of one of its near competitors Barclays bank.
Figure 1 Comparability Lloyds and its sector index
1 . Estimation of Marketplace Model intended for Lloyds
Regression results presentation
Significance Farreneheit is the value of entire model.
In the event its worth 95% validity also if the P-value is usually < zero. 05 then your entire model is valid. In the regression results intended for Lloyd N significance provides a value of 0. 000202026 ( (30% In the regression output brief summary for Lloyds R Sq is twenty-five %(< 30) and so there isn't any good explanation of the data in this regression output.
To get the Significance of coefficients beneath the null hypothesis, each pourcentage has a benefit of 0 In the regression output overview above the coefficient of RFTAS (beta) can be 1 . apr with a p value 95%.
2 . Yield Curve
(a)What is definitely the yield competition?
This is a line chart used in set income investing as a device to show the relationship between bond yields and maturities. It truly is used like a reference point to get forecasting prices bonds and interest rates as well as to come up with approaches that can improve total comes back. The produce curves plot shows the relationship between the time yields to mature as and how extended it will take to get bonds inside the same class of possessions and of the same credit top quality to mature. This romantic relationship is what is called structure of interest rates. Differences in yields...
Sources: PIMCO, 2004. Pacific Expenditure Management. [Online]
Offered by: http://faculty.baruch.cuny.edu/ryao/fin3710/PIMCO_YIELD_CURVE_PRIMER.pdf
Bodie, Z., Kane, A. & Marcus, A. J., 08. Investments. 7th ed. t. l.: h. n.
DAMODARAN, A., 2002. Investment Value: Tools and Techniques for Identifying the Value of Virtually any Asset. New York: John Wiley & Sons.
Deev, O., 2013. STRATEGIES OF BANK VALUATION: A CRITICAL OVERVIEW. Masaryk School, Faculty of Economics and Administration, Department of Financial.
IJM, 2013. VALUING CORPORATIONS BY CHEAPER CASH MOVES: 10METHODS AND 1 ANSWER. International Log of supervision, 4(2).
Lloyds Banking Group, 2014. GROUP OVERVIEW. [Online]
Available at: www.lloydsbankinggroup.com
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