FINANCE FOR BUSINESS - Not more than 3,000 words
Assignment Structure and Details of Assignment Tasks
· Introduction -Briefly introduction: the purpose of assignment, key findings and structure of the assignment (not more than 300 words)
Part 1. Research and fact finding of Australian financial market.
1.1 Comparison of four key financial institutions: commercial banks, insurance companies,
investment banks and investment funds in Australia from the perspective of a potential
investor who would like to invest into the institutions Criteria for comparison include: (1) classification (the group of financial institutions it belongs to); (2) market sector of operation; (3) key business activities; and (4) main source of income.
Organize your group’s comparison in a relevant table. Your group’s research should be
supported by a fact finding of real life examples of a commercial bank, insurance company,
and investment bank and investment fund in Australia. Your group’s discussion on each
example should reflect the above mentioned criteria and the following information: (i) what
is the code of stock listed, (ii) when was the company’s stock was first listed, (iii) what is the
cu
ent market capitalization of that stock, (iv) the cu
ent total share outstanding, (v) who is
the chairman and who is the CEO of that company, (vi) a graph of five year dividend payment for each company and (vii) next dividend date. Using ASX and ASIC websites for the fact finding. Your group is not allowed to choose the cases I have used as examples in this
assignment instruction.
Example: Commonwealth Bank is a commercial bank, which is categorized in the group of
Authorized Deposit-taking Institutions (ADIs) in Australia. Commonwealth Bank operates
in banking market sector. Its key business is taking deposit from individuals as well as
usinesses, and then lend those pooled savings to other individuals and businesses. Its
main source of income is the difference between the interest rates it charges the
o
owers and the interest rates it pays the depositors. The code of listed commonwealth
ank stock on Australian Stock Exchange is CBA. The stock was first listed on 12/09/1991.
The total outstanding share 1,770,239,507. As of 18 Fe
uary 2020, CBA market cap is
158.37bn, Ms Catherine Livingstone is the CBA’s Chairman, Non Exec. Director and M
Matthew Comyn is the Managing Director, CEO, Director. The next dividend payment date
is 31 March 2020.
1.2Analysis of three financial management questions: (i) capital budgeting, (ii) capital structure and (ii) working capital management.
Define the three financial management questions and justify your group’s analysis by
illustrating examples: Choose one or more events described by media (CNN Business,
Financial Times, Dow Jones financial news etc.) about a company who is doing one or more
activities related to the three financial management questions. Analyse that event (s)
applying the three financial management questions. Note: Each question is to be illustrated
y at least one event.
Example of an event in media that reflect one of the three financial management questions:
Commonwealth Bank’s Project Bond-i: Bonds on block chain in collaboration with World
Bank: “In August 2018 the World Bank and CommBank successfully launched Bond-i
('blockchain operated new debt instrument'). It's the world's first bond to be created,
allocated, transfe
ed and managed through its life cycle using block chain technology”.
Source:
https:
www.commbank.com.au
usiness
usiness-insights/project-bondi.html
Bond-I Project by Commonwealth Bank is an outstanding example of capital budgeting in
financial management. This is an investment decision to generate future cash flows for the
ank in providing the auxiliary financial service of issuing debt instruments. Using block-chain technology to create, locate, transfer and manage debt instruments undoubtedly enable huge saving of money and enhancing efficiency. However, the security risk may be a big potential problem for this project.
Part 2. Fact Finding of Australian financial market regulation
2.1 Fact finding of the listing on ASX
Assuming you are working for a company that is considering to be listed on ASX in the
near future. Go to the website of Australian Stock Exchange (ASX), do a fact finding and
present an analysis of Australian Stock Exchange Listing Requirements and process. The
following questions should be addressed:
(1) What are the advantages of being a listed company on ASX?
(2) What are the problems that need to be taken in consideration for being listed
company on ASX?
(3) What are the requirements for listing on ASX?
(4) What are the steps of listing procedures on ASX?
(5) How listing fee is applied. Using ASX listing fee calculator to identify your selected company listing fee, choosing any random number for the ranges of market cap: 10
million -50 million; 50 million-100 million; 100 million-500 million.
2.3 Fact Finding of requirements on Financial advisory service registration in Australia
Assuming after graduation you would like to work as a financial adviser. Go to the website of
Australian Securities and Investment Commission, do a fact finding and present an analysis
of financial advisor registration to identify whether you are qualified and what steps should
e taken to be a financial adviser in Australia. The following questions should be addressed:
(1) What is the ASIC’s Financial advisers register?
(2) Who should be on the Register, who are not on the Register and who updates the
egister?
(3) What information should be on the Register?
(4) What are the relevant financial products for a financial advisor?
(5) What are the professional standards applied for a financial adviso
Part 3. Risk analysis and project evaluation
Case Study: Assume that are the financial manager of a company, which is considering a
potential project with a new product that is expected to sell for an average price of $22 pe
unit and the company expects it can sell XXXXXXXXXXunit per year at this price for a period of 4
years. Launching this project will require purchase of a $ XXXXXXXXXXequipment that has
esidual value in four years of $ XXXXXXXXXXand adding $ XXXXXXXXXXin working capital which is
expected to be fully retrieved at the end of the project. Other information is available below:
Depreciation method: straight line
Variable cost per unit: $11
Cash fixed costs per year $350 000
Discount rate: 10%
Tax Rate: 30%
Do an analysis with cash flows of the project to determine the sensitivity of the project NPV
with the following changes in the value drivers and provide your results in (a) relevant
tables:
Unit sales decrease by 10%
Price per unit decreases by 10%
Variable cost per unit increases 10%
Cash fixed cost per year increases by 10%
Conclusion
Summarize the outcomes of your works (not more than 300 words)
Presentation: Present the assignment using a PowerPoint slides. (Only PowerPoint sliders are required.
· The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm
margins on all four sides of your page with appropriate section headings and page
numbers.
· Reference sources must be cited in the text of the report, and listed appropriately
at the end in a reference list using Harvard referencing style.
FINANCE FOR BUSINESS - Not more than 3,000 words
Assignment Structure and Details of Assignment Tasks
· Introduction -Briefly introduction: the purpose of assignment, key findings and structure of the assignment (not more than 300 words)
Part 1. Research and fact finding of Australian financial market.
1.1 Comparison of four key financial institutions: commercial banks, insurance companies,
investment banks and investment funds in Australia from the perspective of a potential
investor who would like to invest into the institutions Criteria for comparison include: (1) classification (the group of financial institutions it belongs to); (2) market sector of operation; (3) key business activities; and (4) main source of income.
Organize your group’s comparison in a relevant table. Your group’s research should be
supported by a fact finding of real life examples of a commercial bank, insurance company,
and investment bank and investment fund in Australia. Your group’s discussion on each
example should reflect the above mentioned criteria and the following information: (i) what
is the code of stock listed, (ii) when was the company’s stock was first listed, (iii) what is the
cu
ent market capitalization of that stock, (iv) the cu
ent total share outstanding, (v) who is
the chairman and who is the CEO of that company, (vi) a graph of five year dividend payment for each company and (vii) next dividend date. Using ASX and ASIC websites for the fact finding. Your group is not allowed to choose the cases I have used as examples in this
assignment instruction.
Example: Commonwealth Bank is a commercial bank, which is categorized in the group of
Authorized Deposit-taking Institutions (ADIs) in Australia. Commonwealth Bank operates
in banking market sector. Its key business is taking deposit from individuals as well as
usinesses, and then lend those pooled savings to other individuals and businesses. Its
main source of income is the difference between the interest rates it charges the
o
owers and the interest rates it pays the depositors. The code of listed commonwealth
ank stock on Australian Stock Exchange is CBA. The stock was first listed on 12/09/1991.
The total outstanding share 1,770,239,507. As of 18 Fe
uary 2020, CBA market cap is
158.37bn, Ms Catherine Livingstone is the CBA’s Chairman, Non Exec. Director and M
Matthew Comyn is the Managing Director, CEO, Director. The next dividend payment date
is 31 March 2020.
1.2Analysis of three financial management questions: (i) capital budgeting, (ii) capital structure and (ii) working capital management.
Define the three financial management questions and justify your group’s analysis by
illustrating examples: Choose one or more events described by media (CNN Business,
Financial Times, Dow Jones financial news etc.) about a company who is doing one or more
activities related to the three financial management questions. Analyse that event (s)
applying the three financial management questions. Note: Each question is to be illustrated
y at least one event.
Example of an event in media that reflect one of the three financial management questions:
Commonwealth Bank’s Project Bond-i: Bonds on block chain in collaboration with World
Bank: “In August 2018 the World Bank and CommBank successfully launched Bond-i
('blockchain operated new debt instrument'). It's the world's first bond to be created,
allocated, transfe
ed and managed through its life cycle using block chain technology”.
Source:
https:
www.commbank.com.au
usiness
usiness-insights/project-bondi.html
Bond-I Project by Commonwealth Bank is an outstanding example of capital budgeting in
financial management. This is an investment decision to generate future cash flows for the
ank in providing the auxiliary financial service of issuing debt instruments. Using block-chain technology to create, locate, transfer and manage debt instruments undoubtedly enable huge saving of money and enhancing efficiency. However, the security risk may be a big potential problem for this project.
Part 2. Fact Finding of Australian financial market regulation
2.1 Fact finding of the listing on ASX
Assuming you are working for a company that is considering to be listed on ASX in the
near future. Go to the website of Australian Stock Exchange (ASX), do a fact finding and
present an analysis of Australian Stock