Corporate Finance

 

                        

 

  GROUP ASSIGNMENT
Unit:   TFIN 603 Corporate Finance 
Total Marks:   20 marks of the Unit

Instructions:

  1. State and justify all your assumptions 2. This Group Assignment contains two parts:
  • Part 1 (50%) is the work done in Excel. The instructions for the Excel work are found in Part 1 below.
  • Part 2 (50%) is the formal report, follow the “Example Business Report Structure” in Moodle. It should refer to the results found in Part 1, and a full discussion of the questions in Part 2. An incorrect report structure will lose a mark of up to 50%.
  • Part 1 should be submitted separately from Part 2.
  • Part 2 should be no more than 10 A4 pages, or maximum of 3,000 words (all inclusive).
  • Part 2 should be typed in Times New Roman, font 12, 1.5 spacing.
  1. Part 2 (DO NOT INCLUDE EXCEL) should be submitted in Turnitin before 12 noon on 25/5/2021.
  2. Part 1 (EXCEL) and Part 2 (WORD) files should be emailed to chang@imc.edu.au before 12 noon on 25/5/2021, one copy per group. Both Part 1 and 2 should each include a cover sheet containing the name of your company, group member names and IDs.  Failure to submit on time will receive a penalty of 10%.
  3. Each student should email the “Group Assignment Peer and Self-Assessment” form to me, you can find this form in Moodle “Group Assignment”.
  4. You should also write separately about your contribution to the assignment in 300 words or less in your own words and email to me. If you do not write or your content is highly similar to other members, you will not receive the full mark of your assignment.
  5. Any form of cheating will attract a mark of ZERO.

OBJECTIVE

Security Return, Risks and Volume of a company before 1/1/2020 and during 2020 (Covid)

 

Refer to the Excel Example in Moodle, the calculation is shown for Period 1 only.

 

Part 1 – Return, Risk and Volume (50%)

Step 1 Collect 11 years (1-1-2010 to 31-12-2020) of DAILY Adjusted Closing price data and volume for your company from https://au.finance.yahoo.com

Step 2  Use the 11 years All Ordinaries Index (^AORD) ) included in Moodle under “Group Assignment”.

Step 3  For the complete data series:

3a) Calculate DAILY security return Ri.  Ri  = ln (Price t + 1 / Price t )

3b) Calculate DAILY market return Rm.  Rm = ln (AORD t + 1 /AORD t) 

3c) Calculate 20-day Return, Beta, Average volume, Security Risk and Market Risk

Step 4 Prepare the numbers in the same format as Table 1 in the Excel example found in Moodle “Group Assignment.

4a) Average 20-day Return (Period 1 vs Period 2) (10%)

4b) Average 20-day Beta (Period 1 vs Period 2) (10%)

4c) Average 20-day Volume (Period 1 vs Period 2) (10%)

4d) Average 20-day Security Risk (Period 1 vs Period 2) (10%)

4e) Average 20-day Market Risk (Period 1 vs Period 2) (10%)

 

Part 2 (50%)

In a Business Report format, answer the following questions.

  1. What is the meaning of Beta? What type of beta have you found in Part 1? Explain. (5%)

 

  1. What is the meaning of Security Risk and Market Risk? (5%)

 

  1. Carry out a research of your company, and write a summary about the type of business the company is engaged in, and the business environment in Period 1 and 2. (10%)

 

 

  1. Comment on the results in Table 1 between period 1 and 2. (10%)

 

  1. Provide and explain at least FIVE reasons for the changes in the average Return, Beta, Volume, Security and Market risk between the two periods. You must consider the nature of the business, and the external factors during each period. (20%).