Description of Assessment Task and Purpose:
Select a company from the FTSE 350 and access its recent annual reports and publicly available information.
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.