Report- banks ordinary shares is better value for investment

Assignment Help Financial Accounting

Reference no: EM131031977 , Length: word count:1500

Accounting and Finance

Assessment

Task

An overseas institutional investor has approached your investment advisory firm seeking to invest AUD280 million in one of the big local bank's ordinary shares. Your Chief Investment Officer has done some preliminary research on the seven banks financial returns and current financial position that has helped her to narrow the choices down to two banks. You have been given the assignment to analyse and prepare a report as to which of the two banks' ordinary shares is better value for investment.

Based on your market research (qualitative and quantitative) on BENDIGO AND ADELAIDE BANK and SUNCORP GROUP LIMITED, you are required to prepare a report with your recommendation to the Chief Investment Officer, as to which of the companies' ordinary shares is better value for investment. The overseas investor desires high returns and growth and is looking to park the funds for long term i.e. 10 years. In your report, include all the calculations and market information on which your recommendation is based.

Show all your calculations on the annexure. Limit your report between 1,500 to 2,000 words using financial theory and concepts.

For this question you may use information provided In the below websites and any other sources you feel will assist you to come up with your recommendation.

Yahoo! Finance https://au.finance.yahoo.comi

Australian Stock Exchange https://www.asx.com.au/

Reuters https://www.reuters.com/finance/markets

Bendigo and Adelaide Bank https://www.asx.com.au/asx/research/company.d0#!/BEN

Suncorp Group Limited https://www.suncorpgroup.com.au/investors/results-presentations?term=financial-results&year=2015

As a minimum calculate the following to help you come up with a recommendation:

- The required rate of return on ordinary shares of the above two banks using Capital Asset Pricing Model.

- Ordinary share valuation - Constant dividend growth model.

- Find the monthly holding period returns (%) for the period 01 July 2014 to 30 June 2015. The monthly holding period return is the percentage return you would receive if you bought an asset on the first day of the month (opening price) and sold it on the last day of the month (closing price). Graph your results on one graph with returns on the y axis and time on the x axis. (Use 'Close' rather than 'Adjusted Close' for the selling price and ignore any dividends.

Guidelines:

- Base your calculations on the most recent financial results ending 30 June 2015.

Rationale

This report writing will provide an opportunity to apply the concepts in an authentic scenario that you may encounter in the workplace and also:

- be able to demonstrate appropriate communication skills in the context of corporate finance. be able to demonstrate specific technical competencies and skills in utilizing quantitative techniques in financial analysis.

- be able to critically evaluate mainstream financial theory and concepts.

1500 words

Reference no: EM131031977

Questions Cloud

How that data is used for strategic planning : the importance of financial data and its impact on healthcare organizations during the strategic planning process. List what types of data are available to healthcare managers and how that data is used for strategic planning.

How would you approach the council of ministers : How would you approach the council of ministers to negotiate this proposal? Why would you be either for or against such a proposal?

Calculate the length of ps in kilometres : Calculate the area of triangle PSC. give your answer correct to 2 significant figures

Identify leadership styles associated with path-goal theory : Identify four leadership styles associated with path-goal theory. Explain each style and relate it to styles described in other theories. Can leaders exhibit more than one style?

Report- banks ordinary shares is better value for investment : You have been given the assignment to analyse and prepare a report as to which of the two banks' ordinary shares is better value for investment.

What is the conversion cost for may : How many units are in process on 5/31? What is the material cost for May? What is the conversion cost for May?

Determine the amount of additional financing needed for 2009 : Determine the amount of additional financing needed for 2009 under each of the following conditions:

What can you do to reduce any negative impact of feelings : What can you do to reduce any negative impact of such feelings? What are ethical decision-making models and how will you use them in your critical thinking?

What are the entries runway would record : What are the entries Runway would record when the $25 Referral Credit is redeemed against a $100 purchase made by the Existing Customer

User Account

All Pages