Business finance

FIN 510 / FIN 205

Assignment

Marks: 30 (15% weight of total assessment)

Problem 1: Choose a publicly traded company from the Australian Securities Exchange (ASX). The company must have provided at least 4 years of dividend payments information on the ASX website. Provide the following information of your chosen company. 02 Marks

Company Name:

Stock Ticker Symbol:

Stock Information:

Most recent price

Market capitalization

Daily volume

Number of ordinary securities published on ASX

Most recent dividend

Annual dividend yield

P/E ratio

EPS

Company Description:

How to solve this problem? Choose a company from the link bellow. https://www.asx.com.au/asx/research/listedCompanies.do Click on the Key statistics and check if the company paid dividend for the last 4 years. If you see no dividend history available then do not choose that company. Look for another company with 4 years of dividend payment record.

Problem 2:

Read the most recent announcements of the company and explain the information content of the announcement and (if any) related risk for the company. 04 Marks

Announcement date and Headline

Interpret the announcement: Good or bad news

Is the announcement related to systematic risk or unsystematic risk? Explain

Did the share price move up on good news and down on bad news or was the pattern mixed? (Check the share price the dates just before and after the announcement date and check the pattern). Why price movement might occur?

How to solve this problem?

Check the most recent announcement of the company from ASX website (announcement

section).

Problem 3:

Calculate dividends growth rate and the return on share investment. 04 Marks

Dividends Growth Rates {(D1 - D0)/D0} Annual rate of return using Gordon Model (P0 = D1/r-g)

2020 (D4)

2019 (D3)

2018 (D2)

2017 (D1)

2016 (D0

For stock price information (P0) check yahoo finance. You can do this section along with

question number 4.

Problem 4:

Find the beta of the stock for the 4 years period (download weekly price information) and write a summary on your analysis indicating the stock price trend during the analysis period.

10 Marks

How to solve this problem?

Steps in downloading stock price from https://au.finance.yahoo.com/

a. Type the name of your chosen company in yahoo finance search option

b. Click on the historical data

c. Choose time for 4 years data (for example 1 July 2016 – 30 June 2020) period.

d. Show: historical price, Frequency: Weekly

e. Download the excel spread sheet and save it.

f. Keep date and Adj closing price columns and delete open, high, low and volume

columns.

g. Now go back to yahoo finance home page and click on the ASX 200 stock index. Then

click on the historical data and collect data for the same 4 years period weekly data

for the ASX 200 index.

h. Download the ASX 200 index data and only choose Adj closing price. Copy Adj closing

price and past it next to your chosen company’s stock price. Follow the above two

videos to collect data for your chosen company and ASX 200 index.

https://www.youtube.com/watch?v=7LiK-qbmPsw https://www.youtube.com/watch?v=bpnOP0oFSpQ

https://www.youtube.com/watch?v=zlClflcSrM8

i. Then compute returns (returnt = (Pt – Pt-1)/Pt-1 ) of the chosen stock and ASX 200

index for 4 years (weekly data) period.

Your chosen company (1 July 2016 – 30 June 2020)

ASX 200 (1 July 2016 – 30

June 2020) Return (most recent period)

Mean (average returns)

Variance

Standard Deviation

*Slope (Beta)

*Slope = covariance (returns of X company, returns of ASX 200)/ variance of ASX returns. You can either type (=slope (return of X, Returns of ASX 200) in excel or the above slope formula.

J. Now calculate beta by regressing the share's returns on the returns to the index chosen. Report both excel results and regression result with beta. Your calculated slope and beta will be exactly the same. Copy the regression table from the excel sheet and paste it on your assignment word file. For regression analysis, you have to use the analysis tool pack available in excel.

Problem 5:

Discuss (if any) the impact of COVID 19 on the last 6 months (January 2020 to June 2020) stock price movement of your chosen company. 05 Marks

How to solve this problem?

Repeat the procedure of problem 4 for the 6 months period only and then explain your analysis. You may compare the beta of 4 years period with the beta of 6 months period. You may also include the company specific factors (sales, export, production, supply chain etc) that has been impacted by COVID 19 and their related impact on stock price performance.

Problem 6:

Now prepare the presentation of your assignment on a power point file with audio recording (maximum 5 minutes). 05 marks

How to solve this problem

Explain the result of problem 4 and 5 on power point slides (2 to 3 slides) and record your audio on power point. Now upload the recorded power point file to student media upload on Learnline.

Check the link for adding audio on your power point slides

https://support.microsoft.com/en-us/office/video-add-and-record-audio-eeac1757- 5f20-4379-95f2-0d0cd151d5b8

You are required to submit assignment files (word file, excel file and PowerPoint with audit) by the submission deadline of 27 September, Sunday, 23:59 pm (Darwin time).

Strategies for finishing the assignment on time:

1. Choose a company following the selection criteria. Once you have selected a

company, declare the company name in the FIN 510/FIN 205 forum with your student ID (in the forum write student ID and name of your selected company) so that other students do not select the same company. Before choosing a company check the FIN 510/ FIN 205 assignment forum whether your chosen company has been selected by others.

2. Read about the company from ASX and company’s website. 3. Complete assignment questions step by step and check if you are in right direction

according the requirements of the questions. Make sure you practice excel while doing this assignment.

4. Finalize word file (12 font, calibri (body), line spacing single). 5. Finalize excel file with regression results. Upload both the excel file and the

assignment file via assignment submission point. (Please keep a copy of yours excel sheet as a future reference. I might ask you to send me a copy of yours excel file).

6. Proof read your assignment prior to the submission. 7. Submit the assignment prior to the submission deadline. Make sure you have

submitted the assignment on time, as there will be penalty for late submission. 8. Attend or listen to the recorded session on how to prepare your assignment.