fin1

1) Valuing Distressed Firms. Please choose a company from the list below of financially distressed companies and/or companies with high debt to equity ratios. If there is another company you are interested in that has high debt/equity and/or is in financial distress, you are not limited to the lists below. In fact, the list below is from Spring 2015 before the sharp drop in oil prices. You may find good candidates for this analysis in the energy sector.

Referring to the PPT file “Equity as an Option,” please use the Derivagem spreadsheet on ANGEL in conjunction with www.morningstar.com (or another data source), www.ivolatility.com, and www.bondsonline.com to value the two companies and answer the following questions:

a. How does the value you obtained compare to the current stock prices of each stock? Do you think the value you obtained is reasonable as compared to the current stock prices? Would you buy stock in this company based on your analysis?

b. Please look into recent company histories and their financial statements. Would you make any adjustments to the total assets of the firms based on this research? If so, how does that change the valuations you obtain?

List of Distressed Companies and Companies with High Debt/Equity Ratios

Distressed

CLWR

MNI

AKS

RJET

ODP

BKS

SPF

DYN

TLB

KBH

IPSU

DNDN

High Debt to Equity (may be distressed)

AMD	Advanced Micro Devices Inc
AERI	Aerie Pharmaceuticals Inc
ADS	Alliance Data Systems Corp
BEAV	B/E Aerospace Inc
BZH	Beazer Homes USA Inc
BONT	Bon-Ton Stores Inc
BAH	Booz Allen Hamilton Holding Corp
EAT	Brinker International Inc
CCOI	Cogent Communications Holdings Inc
CNSL	Consolidated Communications Holdings
CSOD	Cornerstone OnDemand Inc
CMLS	Cumulus Media Inc
DNKN	Dunkin' Brands Group Inc
FMSA	FMSA Holdings Inc
HEES	H&E Equipment Services Inc
KLAC	KLA-Tencor Corp
KOP	Koppers Holdings Inc
LII	Lennox International Inc
MRD	Memorial Resource Development Corp
MGM	MGM Resorts International
MILL	Miller Energy Resources Inc
NKTR	Nektar Therapeutics
OKE	ONEOK Inc
ZQK	Quiksilver Inc
SUNE	Sunedison Inc
THC	Tenet Healthcare Corp
TUP	Tupperware Brands Corp
URI	United Rentals Inc
USG	USG Corp
VZ	Verizon Communications Inc
VMEM	Violin Memory Inc