Assume that you are working in the corporate financial advisory services department of a large investment bank and your director (who has read extensively about shareholder value analysis) has asked you to prepare a shareholder value analysis
Module Title: Corporate Financial Management
Module Code: 5FNCE007W
Module Status: Core, BA Business Management Finance Pathway
Assessment Weighting: 25%
In Module Assessment: Individual coursework
Provision Marks and Feedback Date:
Where to Access the Feedback: Module Blackboard Site
Feedback Method: Mixture of Formative and Summative Assessment Feedback. Students receive comments on their ability to link theory into practice in terms of applying and interpreting “Shareholder Value Analysis” to a selected company.
The assignment is an individual report on shareholder value analysis of an approved listed company. The company chosen should be one of the top 350 listed UK companies in the London Stock Exchange. Please confirm with your seminar Tutor that your chosen company is appropriate.
Coursework Assignment Outline:
Assume that you are working in the corporate financial advisory services department of a large investment bank and your director (who has read extensively about shareholder value analysis) has asked you to prepare a shareholder value analysis and a short-term valuation report on your chosen company using the following basis for your valuation:
- Planning period is to be set at five years
- A residual value based on constant cash flows from year five onwards (infinite life) will be estimated at the end of this five-year period
- Beta factor to be obtained using current information held on Bloomberg, DataStream or other sources
- FTSE All-share return to be taken as 10%
- Risk free rate to be taken as 3%
- The target capital structure to be set based on the company last financial year (preferably 2019)
- The gross cost of debt over the financing period is to be estimated at 6% per annum
- As for the other key value drivers (forecast sales growth rate, operating margins, tax rate, incremental working capital requirements and incremental fixed asset investment) you are required to decide these yourselves. The director has advised you to review the latest annual report and accounts of your chosen company and use the data therein and other financial journalistic analysis and intelligence that you consider appropriate to help you decide upon the growth levels of your chosen drivers.
1. Using the information on certain key drivers already given above together with the other key driver figures decided upon by yourselves, prepare a spreadsheet using the shareholder value analysis model to determine a purchase price for your chosen company. A short report explaining how the valuation method works and the purpose of each stage in the spreadsheet calculations should support the model.
(Marks allocated: 70% - 700 words excluding appendices)
2. Review the certain value driver’s assumptions given above and growth levels suggested by you for other drivers and write a brief report justifying or criticising the growth levels of the chosen drivers.
(Marks allocated: 30% - 300 words excluding appendices)
An electronic copy of your assignment should be submitted via the module blackboard site.
To ensure anonymous marking Do NOT include your name or student number within the file name or anywhere within your submission. The submission will be subject to anonymous marking. Having logged into Turnitin on Blackboard, the system will record your details anonymously and tutors will only see your name after the entire submission has been assessed and provisional marks have been released to all students at the same time.
You are expected to make full use of all the facilities offered by the University libraries and other sources. Examples of other sources of information include the Financial Times, the Economist, Investors’ Chronicle, Fame database, Bloomberg, DataStream, Excel cards and databases.
The rules on late submission and plagiarism are applied and fully enforced by the school.
Submission of Coursework
Unless explicitly stated otherwise in writing by the module leader, all coursework on this module is submitted via Blackboard only. It will automatically be scanned through a text matching system (designed to check for possible plagiarism).
- DO NOT attach a CA1 form or any other form of cover sheet.
To submit your assignment:
- Log on to Blackboard at http://learning.westminster.ac.uk;
- Go to the relevant module Blackboard site;
- Click on the ‘Submit Coursework’ link in the navigation menu on the left-hand side, as advised by the module teaching team;
- Click on the link for the relevant assignment;
- Follow the instructions.
You will be given details by the module teaching team about how and when you will receive your marks and feedback on your work.
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