BAFI1059: Corporate Finance - Report Writing - Finance Assignment Help

Assignment Task:

Objective 
The objective of this exercise is to enhance students’ understanding of some of the main issues in corporate finance and related business decision-making process. In this project students are required to prepare a business report based on a case study. Details about the case study and its requirements are set out below. 

Scenarios 
It is 31th December 2019. Your team of four people form a financial analysis team at Aussie Finance Consulting (AFC), a renowned financial institution. The executive management of AFC has assigned you a task to carry out a special project for its client Yarra Digital Limited (YDL), which requires preparing a business report. This report will be presented to AFC executive management and also to the senior management of YDL. YDL is a Victorian pay television company—operating in cable television, direct broadcast satellite television, and IPTV streaming services. It was formed in 1999 through a joint venture established between Yarra Broadcasting Corporation and Ultra Digital Network Limited, with Yarra Broadcasting Corporation being the 65% and Ultra Digital Network the 35% shareholders respectively. They provide a full range of television services to corporate and government customers including pay TV, data networks and mobility services through a range of carriers offering choice, control and cost reduction. YDL has been in the business for 20 years now. It is well established and profitably running business thus far. YDL has recently undertaken a market study which costed them $50,000. Findings of the study indicate that it is critical for YDL to upgrade their infrastructure to meet the demand of its customers. They plan to do the upgrade systematically in stages gradually over next few years. They also need to plan their finances to fund the upgrade plan. For the upgrade, they need some critical hardware components. The management has identified two options: (1) In-house production which requires the company to establish their own production facility; and (2) Outsourcing which implies external procurement of the necessary hardware. 

Requirements 
You are required to advise the company on the following: 
a) Capital Budgeting Decision 
(i) Which of the two options should YDL pursue? 
Steps in part (a): 
The first part of the analysis requires you to work out the Weighted Average Cost of Capital (WACC) for YDL with the help of the given information and given data. 
Secondly, evaluate the two options using NPV analysis and clearly identify which of the two alternatives is better for YDL. 

b) Capital Structuring Decision (BAFI1059)
In the next phase, YDL aims at expanding business beyond Victoria and cover all the major cities in Australia. YDL needs to raise more capital for the purpose. However, the executives worry about the high level of debt in the current capital structure and are debating if they should raise sufficient money through common stock only. They intend to use new capital for both
(a) further expansion and 
(b) repaying debt. Doing so will eventually convert the company into an all-equity company. 

(i) Calculate the required rate of return on capital if YDL were to become an all- equity firm. 
 
(ii) In the light of Modigliani & Miller propositions in the perfect world but with corporate taxes, discuss your findings in both the possible scenarios about: - WACC / Cost of capital, and - Cost of equity. Essentially you need to report (no more than 250 words) if your workings validate the arguments forwarded in the Modigliani & Miller theory. 

(iii) Give your opinion if YDL should convert into an all-equity firm and explain why? 

c) Dividend Policy Decision
Another aspect that YDL executives are perplexed about is the dividend policy they should adopt. 
(i) Give your advice with reasoning to the YDL executives if they should pursue dividend distribution or retention as their dividend policy. (no more than 250 words) 

d) Evaluating Leasing Possibility 
Instead of purchasing the machinery, your team, being experienced consultants, wishes to propose to YDL that they have another option which is leasing it. Coincidently, your other client, New Leasing Limited (NLL), may be a suitable lessor. On discussions, the executives at NLL have asked you to prepare a lease quotation that could be forwarded to YDL for consideration. For the purpose, NLL has provided the following information: 
• NLL can get a 5% discount on the purchase and installation price of the machinery. 
• They expect the life of the machinery to be twelve years with no salvage value after that. YDL may use this machinery for seven years, and NLL is confident that it can be leased to others after that. 
• NLL uses the straight-line method for calculating depreciation. 
• As the owner of the machinery, NLL is responsible for its annual maintenance cost. 
• NLL’s applicable tax rate is 30%. 
(i) If the NLL’s after-tax required rate of return is 12% per annum, what will be the minimum annual lease payment that NLL would charge? Consider that NLL requires lease payments to be made annually in advance. 
 
(ii) Calculate the maximum annual lease payment that would make leasing a viable option for YDL? 
 
e) Business Report Overall Quality (BAFI1059)
The assignment is to be presented as a business report to both AFC and YDL executive management. This report needs: 
• Page numbering 
• Informative heading and sub-headings 
• Numbered sections 
• Executive summary 
• Table of contents 
• Reference list 
Your report is to be submitted as a PDF version of your work. 
The report must use a font/fonts suitable for business communication. 
The reference style to be used is Harvard style referencing (author-date). 
Your main report will have word limit of 3,000 words approximately excluding appendix and will be professionally presented. A concise, relevant and visually appealing paper is essential for business communication. 

f) Micro-credential: (BAFI1059)
Complete the Promoting U micro-credential. You may access this through this Canvas site by clicking ‘Modules’ on the left-hand sidebar and navigating to the Creds module. The unique URL is required for submission in this assignment. Please include the link in the last section of the assessment along with the student’s detail. Your teacher will use this link to verify you have completed the assessment. Use the instructions linked on the credential launch page in Canvas to claim your badge and to get your unique URL. In order to qualify for a badge you will need to achieve the stated requirements for the credential. Please refer to the credential launch page for more details including marking turnaround times on submission-type assessments. Badges may take up to 24 hours to be issued. 

This BAFI1059: Finance Assignment has been solved by our Finance Experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.