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The University of Sydney Business School Finance Discipline
FINC 2011 Corporate Finance 1 Major project
Due Date: 4pm Wednesday 24 October 2018


ASX- listed Company Valuation Report

This report requires you to undertake a valuation exercise on an Australian Securities Exchange (ASX) listed company. You are required to use the models presented in the course to calculate a share price for the company and then critically evaluate the value you have determined.

Required:
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’, ‘Metals and Mining’ or ‘Utilities’ company.

2. Using appropriate historical data calculate a beta for the company you have selected. Compare your beta to those published by research houses (ie Morningstar etc) for your chosen company. Are the values different? Why?

3. Using the CAPM model determine an appropriate discount rate for your company. Use a market risk premium of 6.5% p.a. in your calculations.

4. Using a constant growth rate of 4% pa. (commencing immediately) in the constant dividend growth model, determine a current stock price for your company.

5. Suppose that the previous dividend growth rate was only expected to apply for 5 years before reverting to a long-term growth rate consistent with the forecast inflation rate. Demonstrate the impact this would have upon your stock valuation.

6. Now disregard the previous growth forecasts. Using your own variables, determine a current stock price for the company that you think might represent something close to its fair value. Why do you believe the variables you have chosen give a more appropriate value than those used in questions 4 and 5? Discuss.

7. Compare the calculation that you obtained in question 6 with what you would have obtained for the value of the stock using the ‘method of comparables’ stock valuation approach.


Formatting and Presentation:
a. The project 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 project exceeds 12 pages. Hence your mark will be reduced to zero if the project 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 project. (Note the Business School’s referencing style that should be used in written reports see http://sydney.edu.au/business/currentstudents/policy ) You will be penalised for inappropriate and/or inconsistent 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 project is very clear, logical and professional. Pay attention to grammar. Clear and logical presentation is a major challenge in project preparation. Preparing a concise project is another major challenge. Every part of the project should somehow add to the end result otherwise it is superfluous and distracting.

What’s included in the 12 page limit?

– project body

– Tables

– Diagrams


What’s excluded from the 12 page limit?

– Executive summary

– Title page

– References

– Appendices

eg:

Suburban Homes Construction Project case study

· Stakeholder identification and prioritization matrix

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The priorities are decided by considering the total of the individual priorities given to each point in the matrix. Higher the total, higher the priority.




· Stakeholder Matrix

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· Stakeholder Engagement Matrix

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Engagement strategy is how the corresponding stakeholder plans to contribute to the project and its success.


· Communication Matrix

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References:

[1] Timothy J. Kloppenborg. Contemporary Project Management, Fourth Edition, Cengage Learning, 2017. (CPM 4e)

[2] A Guide to the Project Management Body of Knowledge, Sixth Edition, Project Management Institute, 2017.  (PMBOK 6e)
[3] Stakeholder Planning and Communication
(https://www.stakeholdermap.com/stakeholder-planning.html)