Reference no: EM133450156 , Length: word count:1500

Financial Management

Case study - ASX listed company - risk management and corporate governance

Context: There are two parts of this Assessment. First part (Part A) is to calculate Beta (β) (Extract) (systematic risk) of a selected ASX listed company using 10 years' quarterly data. The second part is to provide a case analysis by locating and researching the selected company's financial risk management and corporate governance.

Part A: Calculating the beta of a security [must be submitted in Excel spreadsheet folder on Moodle]

Calculate Beta (β) of an ASX company using 10 years quarterly returns of the selected share, the market index (AOI - all ordinary index) and 10-year bonds. You are required to use Excel program to complete this project. You must use formulae in Excel and must show the formulae in a separate spreadsheet that has been used in completing this part.

Instructions
You need to answer and calculate the following for this part of the assignment:
1. Calculate the data of quarterly returns of the selected company share over past 10 years (i.e., 2012 to 2022).
2. Calculate the data of quarterly market returns (all ordinary Index) of the selected company over past 10 years (i.e., 2012 to 2022).
3. Calculate the data of quarterly 10-year government bond returns (yield) of over past 10 years (i.e., 2012 to 2022).
4. Identify the Ex-dividend dates for selected company over last 10 years (i.e., 2012 to 2022) and the respective dividend paid per share. Then calculate Beta for the selected company.

calculate the Beta use the following formula:

Format for calculating beta you will need the following 16 columns in the Excel spreadsheet:
1. Time (t)
2. Share price quarterly
3. All Ordinary Index (points)
4. 10-year Bond yield
5. Ex-dividend date
6. Dividend Paid per share
7. Stock return (ri,t)
8. Index return(rm,t)
9. Monthly bond return (rf.t)
10. Excess stock return (Y)
11. Excess Index return (X)
12. Variation in Excess stock Return (Y- Mean of Y)
13. Variation in Excess Index Return (X- Mean of X)
14. Product of (Y- Mean of Y)(X- Mean of X)
15. Covariance is the sum of [Product of (Y- Mean of Y)(X- Mean of X)]
16. Variance of Excess Index Return [variance (Index return(rm,t)]

Part B: Involve case analysis on corporate governance and financial risk management (±1000 words). [this part must be submitted in case analysis folder on Moodle]

In this part of the assessment your knowledge and skills about the corporate governance and financial risk management issues of a selected ASX listed company are assessed.

Required:
You are to carry out a case analysis and provide a written report on the corporate governance and financial risk management strategies of the selected ASX listed company using a recent annual report of 2021 or 2022. Your report must include the following:

1. Provide a summary of the selected ASX company.

2. Identify and explain corporate governance strategies of the company

3. Identify and explain finance and treasury functions of the company

4. Identify and compute the following corporate governance indicators from the collected/downloaded annual report for the selected company -
i. Total number of directors (i.e., board size).
ii. Percentage of non-executive directors.
iii. Percentage of independent directors.
iv. The name of the Chief Executive Officer (CEO) and/or Chairman and the summary of his/her statement in the annual reports for the selected companies.
v. Percentage of share hold by the executive directors.
vi. Percentage of shares owned by the block-holders and institutional investors.
vii. A brief on the financial risk management of the company; and

Provide your recommendation: Based on the above corporate and financial management characteristics and the calculation of Beta (in Part

A) extracting relevant past share prices and ex-dividend information of the selected company, market index and risk-free rate and your research about the selected company, you are required to recommend as to whether this company's systematic (Beta) risk is above average of the market. Would you invest all your money into the selected company's share market? If not, why not?

Example: how to get share price history for your selected company (you can select any company not supposed to be same as other group's selection)