1. Each student has been allocated one Australian company. This information is available in the unit website. You should check that a company is assigned to you.
2. It is your responsibility that you have identified the company that you will work. If for some reason, your student ID is not in the list, please notify as soon as possible.
3. You have to collect relevant information from relevant sources and database (e.g: DatAnalysis, Aspect FinAnalysis databases, Financial Review (newspaper) and yahoo finance) and answer the set of questions that follow.
4. You should attach the workings and any additional evidence in the appendix. The material presented in the appendix is not counted towards the words limit.
5. This assessment is designed to test your achievement of Objectives 2, 3, 4 and 5.
6. Assignment should be submitted on or before Friday the 14th may 2010, 5 00 pm
7. No electronic submission of work will be accepted.
8. The word limit for this work should not exceed 2500 words and carries 20 % of the total marks for this subject.
9. Some relevant websites that can be used (but not limited to) are:
10. The assignment has been set out of a total of 60 marks, but will be adjusted to count toward 20 % of the total marks for this Unit.
ASSIGNMENT QUESTIONS
1 General background of the Firm
(i) Briefly describe the profile of your company (include in your discussion: nature of the business, industry and age of your company- Undertake a Brief Business Analysis).
2 Capital Structure of the Firm
(i) Identify the largest funds raised by your company over the last 5 years (this can be rights offering, equity , debt-Note if several, used the most recent one)
(ii) Briefly describe the purpose of funds raised as in (i)
(iii) Identify the initial announcement date of this issue.
(iv) Calculate the return earned by your company from two days before the announcement date to two days after the announcement date of this issue.
(v) Calculate the market return for the corresponding period in (iv)
(vi) Compare (iv) and (v) and comment on how the market perceived this issue
(vii) Identify if the recent financial crisis affect the capital structure of your company. You need to assess the debt to equity ratio of firm with a peer in the same industry and comment on any changes/strategies that has undertaken by the company
3 Valuations
(i) Calculate the value of the share for the last 3 Financial Year end available for the company. Use the most appropriate method of valuation relevant to your company circumstances. On valuation, you need to make estimates for market returns, risk free rate, company beta, growth and others (i.e. the length of high growth period in multi stage model). On each estimate, you have to state your assumptions (and sources, as needed, the data may be from secondary sources) and short discussion on how you come to that conclusion
(ii) Compare these valuation results with the actual currently given by market prices. In most cases the valuation will differ from the actual (i.e. underpriced / overpriced). Discuss those differences, what are your conclusions?