You are required to prepare a report that contains the detailed calculations and critical analysis of the following key informatio

You are required to prepare a report that contains the detailed calculations and critical analysis of the following key information relating to ITV plc

Coursework Question 

You have been hired as a financial consultant to evaluate the capital structure of the media 
companies listed on the London Stock Exchange (LSE). Your manager has asked you to complete the 
following tasks for the integrated producer broadcaster, ITV plc. 

Task 1 (Total 60%) You are required to prepare a report that contains the detailed calculations and critical analysis of the following key information relating to ITV plc: 

(a) the sources of finance and financial gearing; 
(20%) 
(b) the estimated weighted average cost of capital (WACC); 
(20%) 
(c) the limitations of WACC; and 
(10%) 
(d) the likely impact upon the company’s weighted average cost of capital if the company wishes to raise additional debt finance. 
(10%) 

Task 2 (Total 30%) Based on the attached news article in Apendix 1, you are required to: 

(a) provide a detailed valuation of ITV plc using the Dividend Growth and P/E ratio valuation. (10%) 

(b) evaluate critically the possible acquisition of ITV by EasyJet. 
(20%) 

Learning outcomes to be assessed: 
(a) comprehend the primary objective of corporate finance and appraise the different sources of finance; (b) evaluate critically the weighted average cost of capital and capital structure of a firm; and (c) demonstrate a critical awareness of the financial strategies relating to mergers and acquisition. 
For the above Tasks 1 and 2, you are strongly recommended to use the information available from 
the most recent annual reports and accounts and other relevant sources (e.g. academic journals, 
financial news and databases) when writing your report