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Nurfarah Nadiah Muhammad Faizal Tan Zhen Sziq Lam Tee Lim Lim Preetha S Jenarthan

Brooks Associates, Inc. J.C. Penney Corporation, Inc. Evaluation. Nurfarah Nadiah Muhammad Faizal Tan Zhen Sziq Lam Tee Lim Lim Preetha S Jenarthan. Overview. Recommendation Assessments of J.C. Penney Remodeling Strategy Remodeling Strategy Evaluation Financial ratio analysis.

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Nurfarah Nadiah Muhammad Faizal Tan Zhen Sziq Lam Tee Lim Lim Preetha S Jenarthan

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  1. Brooks Associates, Inc. J.C. Penney Corporation, Inc. Evaluation NurfarahNadiah Muhammad Faizal Tan Zhen Sziq Lam Tee Lim Lim PreethaS Jenarthan

  2. Overview • Recommendation • Assessments of J.C. Penney Remodeling Strategy • Remodeling Strategy Evaluation • Financial ratio analysis

  3. Recommendation & Reasons • Recommendation: Do not purchase • Reasons: • Share buyback program • Potential adverse effect of business strategy • Competitive nature of the industry

  4. Assessment of J.C. Penney Remodeling Strategy

  5. Assessment of J.C. Penney’s Pricing Strategy • Fair & Square Pricing strategy: • Drastic implementation of new pricing model • Psychological behavior of consumers Month-long values Everyday Prices Best Price

  6. Improvement of Remodeling Strategy • Roll out new pricing strategy in stages • Localization • Technology: • Mobile Applications • QR code

  7. Impact of Key Competitors Lose Sizable Market Share Superior Business Strategy Attractive Marketing Tactics

  8. Financial Evaluation of Remodeling Strategy

  9. Valuation Revenue growth FY 2013E at -10%, FY2019E to FY 2023E at an average 1% Total Investment is investment in NOWC and Investment in net long-term assets

  10. J.C. Penney Sales

  11. Valuation • WACC: 9.4% • Cost of Debt: 7.12% • Beta: 1.63 • Cost of Equity: 10.8% • 10yr T-bond rate: 4% • Market Risk Premium: 5% Do not Buy $26.75

  12. Sensitivity Analysis

  13. Financial Ratio Analysis

  14. Key Ratios of J.C.Penny

  15. Comparison with Key Competitors

  16. Comparison with Industry

  17. RECAP • Recommendation • Assessments of J.C. Penney Remodeling Strategy • Remodeling Strategy Evaluation • Financial ratio analysis

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