You are required to produce a research report for an Australian Securities Exchange
(ASX) listed company.
1. Select a publicly-listed company on the ASX that has previously made dividend
payments. The selected company should not be classified by the ASX as a
‘Financial’ company.
(https://www.asx.com.au/asx/research/listedCompanies.do)
2. Using appropriate historical data, calculate a beta for the company you have
selected. Justify any assumptions you make citing appropriate academic
literature and/or industry reports.
3. Using the CAPM model, determine an appropriate discount rate for your
company. Justify any assumptions you make citing appropriate academic
literature and/or industry reports.
4. Forecast a growth rate(s) for the company’s dividends. You should conduct
some research on the macroeconomic, industry and firm conditions that could
affect the business. Be sure to reference any work used in your analysis.
5. Using the dividend discount model and your estimation of the discount rate from
part (3), and growth rate(s) from part (4), determine a stock price for you
company. Make sure you justify any assumptions you make. Do you think this
is an appropriate valuation of the firm? Discuss.
6. Value your company using the method of comparables. Do you think this is an
appropriate valuation of the firm? Discuss.
7. Based on your valuations, provide a stock recommendation (e.g., buy, sell,
hold). Clearly discuss the reasons behind your recommendation.
Formatting and Presentation:
a. The assignment should be no more than 12 pages, with 1.5 line spacing and
size 12 Times New Roman or Arial Font. Marks will be reduced by 10% for each
page that the assignment exceeds 12 pages. Hence your mark will be reduced
to zero if the assignment exceeds 22 pages. Brevity and conciseness are key
ingredients of a highly successful report. You will be penalised for inappropriate
formatting.
b. Make sure you use proper referencing in your assignment. All essays must
include a list of references in academic form using the author – date (Harvard)
citation style. You will be penalised if you use inappropriate referencing.
c. Pay particular attention to presentation. A significant component of your mark
will be based on presentation. Avoid overdoing formatting, and ensure that the
assignment is very clear, logical and professional. Pay attention to grammar.
Clear and logical presentation is a major challenge in assignment preparation.
Preparing a concise assignment is another major challenge. Every part of the
assignment should somehow add to the end result otherwise it is superfluous
and distracting. Page limit for assignment – 12 pages
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