CASE STUDY 1: BUSINESS ASSESSMENT AND VALUATION FOR FORTESCUE METALS GROUPLIMITED
The Director of the Business Development Division of Fortescue Metals Group Limited, Mr Peter Lynch, has requested you to prepare an analysis and options report regarding the company, which will be used as an important input into the Board's future strategic decision-making. The report is required to include the following components:
An analysis of the performance of Fortescue Metals Group Limited and the wider iron ore industry over the last five-year period at a minimum, and a risk assessment associated with an expansion of investment and activities in the iron ore sector in Australia.
The determination of the current weighted average cost of capital (WACC) of Fortescue Metals Group Limited.
An estimation of the intrinsic market valuation of Fortescue Metals Group Limited based on current available information.
A recommendation for how an investment in the Roy Hill 1 Project should be funded, taking account of the company's current capital structure, recent financing actions, and the wider economic and financial environment.