UGB363 Strategic Corporate Finance
Individual assignment
Weighting – 100% of the marks for this module
This is an individual assignment of 3,000 words. (+ or – 10%)
Students are required to submit their coursework through JIRA. Only assessments submitted through JIRA will be marked. Any other submission including submission to your study centre in hard copy will be treated as a non-submission.
If your centre supports Turnitin©, a copy of your Turnitin© originality report must be submitted in conjunction with your assignment. It would be a major offence if the plagiarism amounts to more than 10% of the text.
Requirements:
Part A of the assessment is compulsory for all students with a marking allocation of
50% awarded within this element. Students will then select to attempt EITHER Part B or Part C of the assessment with this element of the work also being awarded a mark allocation of 50%.
The assignment has been designed to cover the following learning outcomes associated with successful completion of the module:
Knowledge
K1. Critical understanding of the key strategic decisions that a business may have to make and appreciated how accounting and finance can assist in making and evaluating those decisions.
K2. Critical understanding of specific analytical skills in key decision areas within strategy and finance at local and international level.
K3. Critical understanding of the limitations of the current state of financial theory in making strategic business decisions.
Skills
S1. Competence in applying the key valuation concepts and methodologies of financial decision making in order to contribute to the wider decision making of the organisation.
Part A (compulsory)
You have recently joined the investment team as a financial analyst at Asset Unlimited Consultancy Ltd, a financial advisory firm based within Hong Kong. As part of the initial duties you have been asked by the Board of Directors to investigate the three-year performance of a SINGLE company which could be a technology, property or financial company that is currently listed on the Hong Kong Stock Exchange with the view to potentially investing future company funds into the chosen company.
Required:
Prepare a report for the Board of Directors of Asset Unlimited Consultancy Ltd analysing and evaluating the three-year share price performance of your chosen company.
In this section students should analyse 3-year share price performance of the company by:
i) linking significant news events to the share price increases and decreases;
ii) looking at the company’s financial ratios and one other key area (e.g. dividend policy, M&As, capital structure alteration, corporate governance policy, financing strategy, investment strategy etc.), so can demonstrate both knowledge and understanding of a range of topics, theories, and concepts covered within the UGB363 Strategic Corporate Finance module.
A report format should be utilized that offers clear, concise analysis, resulting in the production of robust recommendations. For ratio analysis, you should show the formula used but could extract the ratios from financial based websites. Marks will be awarded based upon your analysis and interpretation.
Total for Part A – 50 marks
Part B
(a) It was said that “an efficient market is “informationally efficient” if market prices at each moment incorporate all available information about future values and hence the market price is an unbiased estimate of the true value of the investment.”
Required:
Critically evaluate the above statement, ensuring the response is supported with relevant empirical evidence.
(35 marks)
(b) Your friend David has asked you for advice about his investment portfolio. He is considering investing in companies listed on the Growth Enterprise Market (GEM) in Hong Kong because he thinks he can get abnormal returns by investing in GEM.
Required:
Discuss whether the Growth Enterprise Market is considered to be an efficient market.
Explain to David what characteristics are usually required to be present for a market to be described as efficient.
