Description of Assessment Task and Purpose:

Select a company from the FTSE 350 and access its recent annual reports and publicly available information.

Required:

Please write a report of no more than 2,000 words that addresses all requirements listed below:

• Your report must include an executive summary which summarizes the key findings of your research. (200 words, 10 marks)

• Part 1 (800 words, 30 marks): Study the annual reports and describe ONE strategy of this company that has contributed to the overall corporate goal of shareholder wealth maximization. Discuss if this strategy has been consistent over the last 3 years and how this strategy has influenced the company’s share prices. Support your discussion with relevant references to the literature and the industry.
• Part 2 (1000 words, 50 marks): Assuming the company is raising external capital for two new projects worth £100m each in two different industries and the management is planning to use the same discount rate to evaluate these two projects:
  • What would be the pros and cons of using equity and debt financing?
  • Calculate the cost of capital of the external capital given current market conditions.
  • Discuss the discount rate that the company should use to evaluate the two projects. Should the use the same discount rate for both projects?
• In addition to the quality of the above works, the assessment marking is also based on the following criteria (10 marks):
  • Structure and formatting.
  • Number of references.
  • Citations using Harvard Referencing System.
  • Practical data from the case.
  • Practical data from the real world.
  • Logically developed and structured ideas.

Learning Outcomes Assessed:

LO1: Evaluate the importance of capital budgeting, capital structure, risk and return and how these concepts are applied to the operations of the firm.

LO2: Assess and critically evaluate the strengths and weaknesses of the various methodologies which are applied by firms in the processes of achieving shareholder wealth maximisation.

LO3: Critically evaluate the impact of the choice of funding projects/investments and the effects on the capital structure of the firm.

LO4: Critically discuss the debates associated with the application of Corporate Finance and Modern Financial Theory.

Knowledge & Skills Assessed:

Subject Specific Knowledge, Skills and Understanding: literature searching, referencing, techniques and skills subject-specific knowledge.

Professional Graduate Skills: independence and personal responsibility, adaptability, verbal communication, written communication, creativity, critical thinking, IT skills, self-reflection and life-long learning, problem solving, group or team skills, effective time management, working under pressure to meet deadlines.

Emotional Intelligence: self-awareness, self-management, motivation, resilience, self-confidence.

Career-focused Skills:  An understanding of the range of graduate careers, skills and attributes required by employers, a range of strategies to present skills and attributes to employers.

Assessment Submission Instructions:

Post the name of your company to a thread on Blackboard no later than 4pm on Monday 13^th Mar. Each company should be selected only once i.e. if a company name has been posted by a fellow student, nobody can select it again.

Submission: The soft copy of your coursework must be submitted through Turnitin link in Blackboard no later than 12 noon Friday 21st April. Please note if your assignment misses this deadline, your overall mark will be deducted by 10 marks for each late day.

Format for Assessment:

The assignment is limited to 2000 words. Evidence of task completion should be included within an appendix and is separate from the word count.

Please follow to the formatting guidelines:

– Font / Size:                          Arial or Times New Roman / 12

– Spacing / Sides:                1.5 / Single Sided

– Pagination required?        Yes

– Margins:                              At least 2.54 to left and right and text ‘justified’

– Referencing:                      Full compliance with Harvard protocols

 

Note usual practice is to allow +/-10%. If you submit an assignment which exceeds the prescribed word limit, marking will cease at the point at which the limit has been exceeded and the mark will be awarded on the basis of the extent to which the criteria for assessment have been met up to that point.

Marking Criteria for Assessment:

• The executive summary (10 marks):

Normal answer should just list the bullet points while good answers should provide a small discussion on what has been done and found.

• Part 1 (30 marks): Study the annual reports and describe ONE strategy of this company that has contributed to the overall corporate goal of shareholder wealth maximization. Discuss if this strategy has been consistent over the last 3 years and how this strategy has influenced the company’s share prices. Support your discussion with relevant references to the literature and the industry.

Average answer should describe ONE strategy as stated in the annual reports and how this has influenced the performance of the company in general. Better answers should discuss if the strategy is new or consistent over the last 3 years and then discuss this in line with financial performance and the share prices of the company.  Better answers also cite references for the discussion and use practical data from the company and market to support the analysis.

• Part 2 (50 marks): Assuming the company is raising external capital for two new projects worth £100m each in two different industries and the management is planning to use the same discount rate to evaluate these two projects:
  • What would be the pros and cons of using equity and debt financing?
  • Calculate the cost of capital of the external capital given current market conditions.
  • Discuss the discount rate that the company should use to evaluate the two projects. Should the use the same discount rate for both projects?

Average answers should simply list possible pros and cons of the equity and debt financing with some simple calculation of the cost of capital. Better answers should calculate the cost of capital for external capital with data from the company; recognize the fact that two projects in two different industries (i.e. different risk levels) should require two different discount rate for project evaluation purpose. Better answers should also use more practical data from the company and market.

• In addition to the quality of the above works, the assessment marking is also based on the following criteria (10 marks):
  • Structure and formatting.
  • Number of references.
  • Citations using Harvard Referencing System.
  • Practical data from the case.
  • Practical data from the real world.
  • Logically developed and structured ideas.

Please note that all work is assessed according to the University of Lincoln Management of Assessment Policy and that marks awarded are provisional on Examination Board decisions (which take place at the end of the Academic Year.

Feedback Format:

The mark and feedback would be provided via Turnitin. If students want to discuss the mark, they could book for a one-to-one meeting with the module co-ordinator/tutor.

Additional Information for Completion of Assessment:

Please use the journal papers (see the ABS list) and finance websites to get information for the research.

Assessment Support Information:

Students could book for one-to-one meeting with the module co-ordinator/tutor to discuss the assessment.

Important Information on Dishonesty & Plagiarism:

University of Lincoln Regulations define plagiarism as ‘the passing off of another person’s thoughts, ideas, writings or images as one’s own…Examples of plagiarism include the unacknowledged use of another person’s material whether in original or summary form. Plagiarism also includes the copying of another student’s work’.

Plagiarism is a serious offence and is treated by the University as a form of academic dishonesty. Students are directed to the University Regulations for details of the procedures and penalties involved.