GROUP COURSEWORK BRIEF: Module Code:
Advanced Corporate Finance
Submission Due Date: @ 16:00
Method of Submission:
Electronic via Blackboard Turnitin ONLY (You are not required to submit a hard copy)
(Please ensure that your name does not appear on any part of your work)
Group Coursework Brief:
You should be aware that all members of your group share responsibility for any academic integrity breaches or other issues that may arise from your group’s coursework submission. PLEASE NOTE THAT ONLY ONE MEMBER OF THE GROUP SHOULD SUBMIT THE ASSIGNMENT TO BLACKBOARD TURNITIN.
This group coursework requires that you analyse ten (10) FTSE250 or S&P500 listed companies. Five (5) of these companies should be of the same industry sector of your choice. The other five (5) companies must be from the financial sector. The analysis must span over at least five years. The analysis should include the following:
1. Discuss the core business of each company briefly. Critically analyse their strength, weakness, opportunities, and threats. This discussion can range from the firm-, industry-, market- level to a discussion of possible technological innovation or climate change impact on your chosen firms.
2. Discuss each firm’s
(a) capital structure; short-debt issuance, long term-debt issuance, public debt, private debt, or other debt financing.
(1) leverage ratio and discuss that with respect to the size of the company.
(2) profitability ratios and,
(3) liquidity ratio.
Critically discuss the changes of these ratios over the at least five years of your analysis. Are the changes of these indicators related to the discussion in point A above?
3. Estimate the
(a) Cost of Capital of your firms using CAPM-Based estimation and Unlevering Beta.
(b) cost of debt of your companies.
4. Re-run the above estimations by:
(a) using the nominal risk-free rate
(b) real risk-free rate
(c) Stress-test your calculations by assuming a spike in interest rates at 6.5%
5. Discuss critically the differences between the companies from the industry sector of your choice and the companies from the financial sector.
6. Chose your benchmark company in both industries (financial and the one of your choice) and discussed their performance with the discussion under point 1 above.
7. As a financial analyst provide a buy/sell recommendation for each of your companies. Discuss and justify your recommendation.
You can use annual reports, analysts’ reports, and financial data providers such as Datastream, Bloomberg, Google Finance, Yahoo Finance or similar providers to access the necessary information to complete this task.
Nature of Assessment: This is a SUMMATIVE ASSESSMENT. See ‘Weighting’ section above for the percentage that this assignment counts towards your final module mark.
Word Limit: +/-10% either side of the word count (see above) is deemed to be acceptable. Any text that exceeds an additional 10% will not attract any marks. The relevant word count includes items such as cover page, executive summary, title page, table of contents, tables, figures, in-text citations and section headings, if used. The relevant word count excludes your list of references and any appendices at the end of your coursework submission.
You should always include the word count (from Microsoft Word, not Turnitin), at the end of your coursework submission, before your list of references.
Title/Cover Page: You must include a title/ cover page that includes: your Student ID, Module Code, Assignment Title, Word Count. This assignment will be marked anonymously, please ensure that your name does not appear on any part of your assignment.
References: You should use the Harvard style to reference your assignment. The library provide guidance on how to reference in the Harvard style and this is available from: http://library.soton.ac.uk/sash/referencing
Submission Deadline: Please note that the submission deadline for Southampton Business School is Friday 12 April, 16.00 for ALL assessments.
Turnitin Submission: The assignment MUST be submitted electronically via Turnitin, which is accessed via the individual module on Blackboard. Further guidance on submitting assignments is available on the Blackboard support pages.
It is important that you allow enough time prior to the submission deadline to ensure your submission is processed