BAFN200 Principles of Finance Accounting Management

Why this assessment?

What are the types of employability skills that I will acquire upon completion of this assessment?

Developed critical and analytical thinking

Developed ability to solve complex problems

Developed ability to work effectively with others

Developed confidence to learn independently

Developed written communication skills

Developed spoken communication skills

Developed knowledge in the field of the study

Developed work-related knowledge and skills

This assessment task consists of a 2,000-word structured response on practical scenarios. This task requires students to demonstrate their knowledge of the topics covered in the unit and to ascertain whether students have achieved the intended learning outcomes satisfactorily.

Task 1: Bond Analysis (1-2 Pages)

In this part of the assignment, you will analyse one of the firm’s outstanding bonds. Firstly, compute the yield on this bond. To simplify your calculations of the current required rate of return of the company’s bond, assume that the last coupon payment has just been made.  Secondly, estimate the bond’s price one year from now (assuming that interest rates remain constant), and provide commentary.

Task 2: Share Analysis (2-3 Pages)

In this part of the assignment, you will analyse your company’s shares.  Firstly, provide a graph and comment on the company’s stock price changes in the previous five years. Explain what factors have caused the stock price to develop as it did and link this investigation to your analysis in Task 2 of the assignment.  Secondly, provide an overview of the firm’s dividend payments during the previous 5 years.  If your company paid dividends more often than once a year, sum up all dividends to find the total yearly dividend.  Using the dividend discount model, estimate the return that investors currently require for holding your company’s stock. You can assume that the firm’s dividends will continue to grow indefinitely at the same rate as the average dividend growth rate in the previous five years, or you can make alternative assumptions on the future dividend payments, as you see fit.

Task 3: Dividend policy (1-2 Pages)

In this part of the assignment, you will provide an overview of the company’s payout policy in recent years. Which percentage of the company’s earnings was distributed to investors as dividends?  Which percentage of earnings was reinvested in the company? Did the company engage in dividend smoothing? Did the company do any share repurchases in recent years? (One way to find out about share repurchases is to investigate any changes in number of outstanding shares on the company’s balance-sheets between different years).  Why do you think the company made these decisions?

To find out whether a company that you are interested in has bonds outstanding, type the name of your company in the search bar on investing.com, and a dropdown menu will appear showing all outstanding securities of this firm (there should be shares as well as bonds).

To find out whether a company you are interested in has been paying dividends, select the stock of your company on Yahoo Finance, and go to Historical Data, and select Show: Dividends Only.  (Hint:  firms that both pay dividends and have bonds outstanding are often mature, well-established firms)

List of suggested companies

The list of suggested companies (but are not limited to) is in the following Table 1. Other data sources for this task include (but are not limited to) DatAnalysis Premium (access through the library), IBISWorld Australia Company Profiles (access through the library), Investing.com, Yahoo Finance, and Annual Reports.

Your firm analysis report will need to be presented in an academic report.  Please see the check list for the requirements of a high-quality report. Make sure that in each part of the assignment you clearly explain the methods used, show your calculations, and comment on the results of your analysis.

Your assignment should have a reference list with at least 3 references from reputable business publications. Appropriately cite reference for original work, author(s) etc. All referencing should be in ACU Harvard style; however, if you are coming from another faculty, you may choose to use your usual referencing style. If this is the case you must indicate at the top of your reference list what referencing style you are using (e.g., APA, MLA, Chicago, etc). Please ensure your assignment makes use of in-text citations and a reference list. Missing citations or references is equivalent to plagiarism