FINANCE AND QUANTITATIVE METHODS ASSIGNMENT
Select a company from the list below:
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COMPANY NAME
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SYMBOL
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GICS SECTOR
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Cochlear Ltd
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COH
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Health Care
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Boral Ltd
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BLD
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Materials
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Bluescope Steel Ltd
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BSL
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Materials
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Metcash Ltd
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MTS
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Consumer Staples
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Seek Ltd
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SEK
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Industrials
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ResMed Inc
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RMD
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Health Care
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Tatts Group Limited
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TTS
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Consumer Discretionary
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Washington H Soul Pattinson & Company Limited
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SOL
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Energy
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Crown Resorts Ltd
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CWN
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Consumer Discretionary
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Cleanaway Waste Management
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CWY
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Industrials
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My company name is Bluescope Steel Ltd.
Required:
Suppose you work for an S&P/ASX20 company which is exploring opportunities to acquire a business. Chief Executive Officer (CEO) is seeking your recommendation whether the company you selected would be a worthy target for acquisition. You have been asked by CEO to write a report addressing the industry outlook, risk profile, cost of capital and dividend policy and make recommendations.
A) Industry and market outlook
Describe the economic and industry environment for the industry in general and the selected company in particular. Critically evaluate and comment on the key factors that affect the company's attractiveness for investment.
B) Risk analysis
Outline and comment on the risk (both systematic and unsystematic risk) profile of the company. Determine the beta for the firm using raw data. Discuss the issues associated with estimating beta.
C) Cost of capital and capital structure
Determine the cost of capital for each source of finance as well as the weighted average cost of capital for 2016. What does the WACC suggest for the company? Provide an evaluation of the company's capital structure policy and recommend an appropriate capital structure policy for the company. Do you find the capital structure risky for the company? Justify your answer.
D) Dividend policy
Analyze the company's dividend practices and the use of internal funds over the 2007-2016 period. Describe the dividend pattern and policy followed. E) Share price performance Analyze changes in the of share price over the past 10 years, and based on your analysis discuss the performance of the company over the past 10 years.
Format of the assignment -
An assignment coversheet (ensure group members' full names and student numbers are correctly written, and the part each student completed specified)
A table of contents
An introduction
The body of the assignment
References
12-point Arial or Times New Roman font with 1 inch margins on all sides.
Double-spaced
All pages following the cover page should have a page number.