HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION Faculty of Higher Education Group Assignment Cover Sheet Unit Code HI5002 Unit Name Finance for Business Group 246 Due Date 7 June 2020 Declaration We...

HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
    
Faculty of Higher Education
Group Assignment Cover Sheet
    Unit Code
     HI5002
    Unit Name
    Finance for Business
    Group
    246
    Due Date
    7 June 2020
Declaration
We certify that:
1. This assignment is our own work. We have acknowledged and disclosed any assistance received in its preparation and cited all sources from which data, ideas, words (whether quoted directly or paraphrased) were taken where it is applicable.
1. This assignment was prepared specifically for this unit only.
1. The reference list is truthful and accurate and in Harvard referencing style.
     Student name and ID
    Campus and Interactive Tutorial Group Numbe
    Lecture
    Which section(s) did each person work on
    Contribution (%)
    
    
    Phuong Duong
    Part 1
    
25%
    Damdinbazar Baldangombo THI3111
     MLB, Group 1
    Phuong Duong
    Introduction, Part 2
    25%
    Sonam Tamang
MMM2016
    SYD, Group 4
    Phuong Duong
    Part 3, final edit, and submission
    25%
    
    
    Phuong Duong
    Conclusion, referencing and editing
    25%
HI5002 FINANCE FOR BUSINESS
GROUP ASSIGNMENT
TOPIC: Research on Financial market and Capital Budgeting Analysis
Contents
Introduction    4
Part 1.1: Research of Australian financial market    5
Part 1.2: analysis of financial question    7
Part 2.1: Fact finding of Australian financial market regulation    8
Part 2.2: Financial adviser register    12
Part 3: Risk analysis and project evaluation    13
Conclusion    22
References    22
Introduction
The main goal of this assessment is to acquire basic knowledge about Australian financial market and financial market regulation of Australia while strengthening our theoretical knowledge of risk analyses and project evaluation. As aforementioned, this assessment consists three part. Firstly, in addition to analysing Australian financial market by comparing four main financial institutions in Australia, this paper will also discuss three financial management questions. Second part of the assessment will focus more on regulation of listing with Australian stock exchange as well as financial advisory service registration. In the last part of our assessment, it will work on case study related to risk analyses and project evaluation by performing sensitivity analysis.
2
Part 1.1: Research of Australian financial market
1.1 Here is a list of selected four companies belong to the financial industry and falling the different service sectors
The above table summarises the essential information of selected four business entities, which are from same industry and but offer the various type of financial management related services. The one of the selected four company is from the banking sector, another one from the financial, and rest two are from the investment banking companies.
Here is a list of divided history of Macquarie Group
    Date of announcement
    Period
    Yield
     XXXXXXXXXX
    Final
    $1.80
     XXXXXXXXXX
    Interim
    $ 2.50
     XXXXXXXXXX
    Final
    $ 3.60
     XXXXXXXXXX
    Interim
    $ 2.15
Commonwealth bank divided history
    Ex divided
    Record date
    Amounts
     XXXXXXXXXX
     XXXXXXXXXX
    $2.00
     XXXXXXXXXX
     XXXXXXXXXX
    $2.30
     XXXXXXXXXX
     XXXXXXXXXX
    $1.90
     XXXXXXXXXX
     XXXXXXXXXX
    $ 2.20
ANZ Investment Bank divided history
    Date of announcement
    Period
    Yield
     XXXXXXXXXX
    Final
    $1.04
     XXXXXXXXXX
    interim
    $1.14
     XXXXXXXXXX
    Final
    $1.14
     XXXXXXXXXX
    interim
    $1.14
     XXXXXXXXXX
    Final
    $1.14
Part 1.2: analysis of financial question
A) Capital structure
Coverage story of CNN, on capital structure and the debt capital management strategy of Multination company Amazon, today we all knows that world countries are suffering from the pandemic created by the Chania by spreading a Virous, of Coved -19, there are many national multination companies, such as Amazon, Google and other similar company face a continues pressure in term of capital requisition, the financial experts was on the views that the small and medium company who are largely affected by the lockdown, and there are number of factors which are responsible for the pressuring situation of company, but the multination company whose capital structure is free from external debts are in position to manage the challenges created by the external business environment, CNN has reported that the Amazon, google and other similar type of multination companies are free from debt capital and as a result of which company is in position to continues its operation. (Anon (2020).
B) Capital budget
Report coverage by Fox News : the capital budgeting Is a financial management concept, where number of investment and or the expansion proposal are analysis by using the capital budgeting theory, the story cover by the CNN news about the plan of American companies to make an investment in to the oil industry, the investment option Is being analysing with the help of capital budgeting concept, the oil companies from Australia has decided to make investment in oil Companies of gulf countries. The financial expert was on the views that the investment option can be profitable only when the option has a positive value of NPV. (Anon (2020).
C) Working capital management
Coverage by CNN : the common wealth is one of the leading bank form Australian and many financial institutes take a advice and view from the financial team of Chief executive staff of the Commonwealth bank, Bank has sound internal working system to manage the leakage of fund. (Anon XXXXXXXXXXMoreover, the closely observation of internal control system people help the corporation in maximising the wealth of the corporation, the Do not take a high amount or bunch of cash out of the bank because of this world pandemic corona virus
Part 2.1: Fact finding of Australian financial market regulation
Listing with the ASW allows the company to get capital they need from a
oad range of investors in Australia.
Table 2.1: Advantages of listing with ASX
    №
    Advantages of being listed with ASX
    1
    Access to capital growth
    Being listed on the ASX opens the possibility for the company to raise capital for their future projects such as expanding their business or acquire or set up new business.
    2
    Institutional investment
    A company which is listed with the ASX, attracts professional or institutional investment because the availability of the information as well as trading liquidity on the market. Benefit of attracting institutional investors, is that they
ing business credibility, stability, and wider business networks.
    3
    Alternative cu
ency for growth
    Listing on a public market makes the company’s shares more diversified and liquid, therefore the shares of the company can be used instead of payment in the any form of acquisition of another business.
    4
    Higher public and investor profile
    Public reputation of the company that is listed on ASX improves while being covered in analyst reports and included in share market index.
    5
    Improved valuation
    The companies that are listed in the ASX will be independently valued by the market based on its cu
ent information available.
    6
    Reassurance of customers and suppliers
    Companies which are listed on ASX can find the perception of their financial and business strength improved. The rigorous due diligence process conducted as part of the listing process, and ongoing compliance with continuous disclosure rules can reassure companies that deal with company.
    7
    Greater efficiency
    The requirement of listing with ASX can improve company’s internal control and management information which will increase its operation efficiency.
    8
    A secondary market for a company’s shares
    Being listed with ASX allows a company to offer its shares to public which gives an opportunity of widening its shareholder base.
    9
    Alignment of employee and management commitment
    Being listed increases the benefit of remunerating employees with shares for the company and this incentive schemes give employees an opportunity to help the company’s growth, which in turn attract and retain high quality employees.
(Australian Securities and Exchange, 2020)
However, before listing with ASX, the following drawbacks need to be considered.
Table 2.2: Disadvantages of listing with ASX
    №
    Cons of being listed with ASX
    1
    Susceptibility to market conditions
    Market conditions beyond a company’s control such as rumour on the market and general economic condition will affect the price and liquidity of the shares of the company no matter company’s success.
    2
    Disclosure and reporting requirements
    Additional management time and investment in information costs are required because of more high degree corporate governance.
    3
    Media exposure
    Media exposure may or may not benefit listing of the company.
    4
    Costs and fees
    The total costs of doing an IPO include underwriting,
okerage fees, accounting, legal and other professional fees as well as prospectus costs and ASX listing fees.
    5
    Reduced level of control
    Level of control of the company by the directors and founding shareholders will be reduced.
    6
    Management time
    Being listed with ASX takes considerable amount of time from management.
    7
    Director responsibilities
    Listing with ASX
ings greater responsibility for managers and directors.
(Australian Securities and Exchange, 2020)
To list a company with ASX, the company needs to have at least 300 non-affiliated shareholders with more than $2000 each. In addition, company must have 20% free float spread. Before being listed with ASX, a company must go through profit or Assets test. A company with $1 million aggregated profit from continuing operations over past 3 years and $500000 consolidated profit from continuing over the last 12 months. in the matter of Assets test, company needs to have $4 million net tangible assets or $15 million market capitalization. (Australian Securities and Exchange, 2020)
Table 2.3: Listing process
    Steps
    Weeks
    Process
    1
    Appointing advisers
    1
    To be successfully listed with the ASX, it is crucial to have an experienced team of advisers.
    2
    Preparatory work
    2-10
    In this step, a company drafts the prospectus, listing application and other required documents. Prospectus includes key information about the company such as business model, financials, and detail of the offer. The company also needs to go through due diligence process which is guided by a committee to ensure the prospectus meets legal requirements.
    3
    Commence Institutional marketing
    10-12
    Advertising of an IPO is strictly limited by the Corporation act; however, companies can take certain marketing activities such as meeting with the investment bankers and institutional investors.
    4
    Lodge prospectus with ASIC
    11-12
    From date of lodgement an exposure period begins. During this time, the prospectus is made available for public review and the company cannot accept any application.
    5
    Processing of listing application by ASX
    11-16
    Within seven days of lodgement of the prospectus with ASIC, the formal listing application must be lodged and the review and approval of the application by ASX typically completed withing six weeks.
    6
    Marketing and offer period
    13-17
    After the exposure period, a company can make offer to investors for three to five weeks.
    7
    Closing the offe
    18-19
    In final step, shares are allocated, and trading commences.
                     (Australian Securities and Exchange , 2020)
Listing fee will depend on the market cap of the company as follows:
Table 2.4: Listing fee
    Market cap of