CORPORATE FINANCE

Macquarie Group Valuation Report

Executive Summary

This report is for recommending the clients or investors whether they should invest in Macquarie Group or not, based on the financial analysis of company's dividends, share prices, growth rate, and required rate of return. The key focus of the business is on producing profits by offering a diversified and wide range of services to the customers across the globe. The company acts on behalf of the corporate, institutional, as well as retail customers and counterparts all around the globe. The company has reported good financial results as per the highlights of FY13 of Macquarie Group. The operating expenses during the period (excluding brokerage and commission expenses) is declined during the period as compared to previous year, which is mainly achieved by consistent ongoing cost decrease initiatives. The balance sheet as well as operating income of the firm also demonstrated a strong position while being stable during the period. This report mainly focuses on the expected perpetuity growth in the dividends of the firm, expected next month dividend, required rate of return using CAPM, and the expected current share price using Constant Dividend Growth Model; hence, providing a framework for company valuation for investors.

Macquarie Group Valuation Report

Overview of Macquarie Group

Company Profile

Macquarie Group is an international provider of financial, banking, investment, advisory, as well as funds management services. The key focus of Macquarie's business is on generating returns by offering a diversified and wide range of services to the customers across the globe. The business acts on behalf of the corporate, institutional, as well as retail customers and counterparts all around the globe. The business is expert in particular industries, including energy, commodities as well as resources, real state as well as infrastructure, and financial institutions. Macquarie Group was founded in 1969 and currently it employs more than 13, 600 workers around 28 nations, and the assets under management of Macquarie Group are $ US 361 billion (Macquarie Website, 2013, n.d).

Macquarie Group Ltd. is listed in Australia (ASX : MQG; ADR : MQBKY) and is in harmony with APRA, the Australian banking regulator, as the owner of Macquarie Bank Limited, an official deposit taker. The company also poses a bank in the United Kingdom known as “Macquarie Bank International Limited”, which is regulated by the Financial Service Authority. Furthermore, the activities of the firm are also subject for scrutiny by other regulatory organizations across the globe. The approach of business's management is to encourage an entrepreneurial culture among the employee, where, effective prudential supervision is essential for this approach. Moreover, vigorous practices of risk management are rooted in business unit management of the firm with central oversight of credit, funding, market, operational and compliance risk. These elements along with the efficient and committed group are major drivers of the company's success (Macquarie Website, 2013, n.d).

Financial Overview

The company has reported good financial results as per the highlights of FY13 of Macquarie Group. The operating expenses during the period (excluding brokerage and commission expenses) ...