Instructions
- This Assignment will covers LO1, LO2, LO3 and LO4.
- Read the assignment questions carefully and answer.
- You can form a group of two to make the assignment.
- The Submission Deadline is 5 May 2023.
- Submit one soft copy through turnitin.
- Plagiarism limit is 10%.
- Submit one hard copy in a file with copy of the plagiarism report attached.
- The report should be typed or word-processed and should comprise no more than 2,000 words.
Aim
The assignment is designed to test your understanding of corporate finance and explores a number of areas within the module by applying your learning to a real company. There is no perfect answer and therefore you should state your assumptions clearly and make good use of appendices. Remember, this is not a strategy or marketing assignment!
Required:
- 1. Select a UAE based company or any other multinational company, listed in a well-established Stock Exchange (see below for choice of company):
- 2. A brief introduction of the company selected.
- 3. Download the five years financial statement of that company.
- 4. Discuss how successful the company has been at delivering value to its shareholders over the past 5 years. Make sure to use appropriate metrics and benchmarks. (CLO1)(K1-2.5 Marks)
- 5. Discuss the capital structure of the selected company. Explain the different capital structure
Theories. (CLO1) (K1-2.5 Marks)
- 6. Analyze the different dividend policy of your selected company and discuss the various dividend Theories that enhances the investment of the selected company (CLO3) (S5-5Marks)
- 7. Evaluate the various financial resource in UAE based company and make a financial decision for raising the best financial proposal for their capital structure. (CLO4) (CRC4- 5 Marks)
- 8. In an expansion process, the company is planning to invest a sum of $500,000. And the company has a choice of two investment project and its expected cash inflows are 1st year $150,000, 2nd year $200,000, 3rd year $250,000, 4th year $300,000 and 5th year $250,000. Second project cash inflows are 1st year $100,000, 2nd year $150,000, 3rd year $200,000, 4th year$250,000, 5th $300,000. Calculate companies Simple payback period, Accounting Rate of Return, Discounted payback period, NPV, PI and IRR of the company. Based on the calculations. (CLO2) (K5-5 Marks)
8. Key summary of your conclusion
You must clearly explain all of your assumptions used in the valuations.
Choice of company
Choose a listed company on a recognized stock exchange (e.g. Abu Dhabi , Dubai, London, New York, Tokyo, Mumbai) for which you can access the share price data over the past 5 years. Large companies will provide financial data on the websites, often under a section titled ‘investors’. More information on choosing an appropriate company can be found in the formative assessments.
The report should include:
1) A bibliography of sources of information used and references to texts or other Detailed tables, extracts or copies of financial information, which should include a copy of the relevant financial statements, should be placed in the appendices. You should refer to them in the body of the report.
Other special reports, for example, Company Focus, are available from the Financial Times Share Service, or brokers’ circulars issued from time to time by the broking arm of numerous finance houses. Data can also be found online from the company websites and other internet sources.
