FINC20018: Warren Buffet's Approach- Financial Case Studies- Financial Assignment Help

Internal Code: 1HCFA

Financial Assignment Help:

Task: Section 1: Overview This is a group assignment. There are two parts.

• Part 1is based on a case study and will assess your research, analytical and written skills as well as your understanding of share valuation techniques. The topic draws from material covered in Week 6 – Chapter 10 Share Valuations. All questions were developed from your prescribed textbook, Managerial Finance – Principles and Applications by Titman et al. (2016).

Important Note: To compete part 1 you will need to purchase a recent copy of the Australian Financial Review [i.e. not less than 3 months old].

• Part 2 requires you to consider the approach Warren Buffet uses to do a share valuation

Additional resources may be uploaded to FINC20018

• Part 3 requires you to compare Warren Buffet’s approach to share valuation and the share valuation methodology in Chapter 10 and recommend which approach you prefer and why.

Specific task requirements are detailed in Section 3 – Task Requirements and Marking Criteria. What is a Group?

• For campus students: a group can be a group of 1 or 2 students.
• For distant learning (FLEX) students: while a group of 1 is likely to be more practical, you also have the option of forming a group of 2 students.
• Important Note 1: Students working as a group, only one member of the group will submit the assignment online by uploading it in Moodle.

Section 2: Submission Details Submission Format: You are required to present your response in report format. Word Limit: The word limit is 1,350 words and excludes title and cover pages, table of contents, reference list, and appendix and any other supplementary material or attachments. Important Note: This word limit and the number of references are based on present recommended School of Business and Law policy for post-graduate students. The minimum number of references: In total [i.e. for both Part 1, 2 and 3] the minimum number is 5 and must include 5 peer-reviewed articles. You may use well-known newspapers, magazines, and reliable internet and journal sources such as Applied Finance, Financial Analyst Journal, and Journal of Banking & Finance. Wikipedia and Investopedia are not permitted to be used as sources. Submission Online: You MUST submit this assessment online as a word document. We will not accept PDF submissions. Issues that will affect your marks include:

1. Create your own cover page for your Report, but do not include the Marking Sheet or the marking criteria/rubrics in your report. You grader will take care of this when they grade your paper to provide you feedback on your report. Make sure both student members of you group is added to your cover page.
2. Where copying from other sources results in high percentage similarity, we will deduct marks as shown on the mark-sheet. Therefore, proper use of in-text referencing is important. Avoid direct quotes.

Turnitin checks percentage similarity. Do not copy the questions from the textbook, as this will increase your percentage similarity. Under extreme circumstances where high % similarity indicates copying from written works of other students in CQU, other universities or any other institutions worldwide, the assignment will be reviewed by the academic misconduct board. If percentage similarity exceeds 20%, then we will deduct marks based on a progressive scale as determined by the course coordinator.

3. A marking rubric is provided in Section 3 and totals 50 marks and will be scaled down to reflect a grade out of 30%.

The assessment is worth 30% total assessment grade. We record your final grade on Moodle as a percentage of 30%.

4. The penalty for late submission is 5% per calendar day including Saturday and Sunday.

 Section 3: Task Requirements The task is based on a real-world case study and as stated, there are three parts. You are required to present answers to some questions in a single report. To demonstrate in-depth of understanding of share valuation techniques, it is expected that you extend your research beyond the prescribed textbook when making comparisons about share valuation techniques. Section 3: The Case Study Obtain or purchase a recent [i.e. less than three months old] copy of the newspaper Australian Financial Review or access the information online at this link http://www.afr.com/ (you can obtain a free subscription for one month) Refer to thepage that provides details of shares currently traded on The ASX. TASK 1 Just like an investor, select ten listed ordinary share companies from and create a portfolio. For instance, select 3 shares from list of Information Technology, 4 shares from Energy and 3 from Financials

1. Using equity valuation methods taught in Week 6 and described in Chapter 10 calculate the value of each selected ordinary share investment in terms of your required rate of return.

Hint: To answer the question, you will need to calculate the value of the companies selected, and to do that you need to demonstrate that you have learnt something about equity valuation. In your analysis, consider valuing the shares using the ordinary share discounted dividend model and then the comparable approach to valuing ordinary shares. Consider the principles that will determine the value of a company in your report.

3. Rank the ten investments in order of desirability. Explain why you have ranked them in this way. [10/40 marks for content and knowledge]
4. Which investment of the ten would you select? Why? [5/40 marks for content and knowledge]

TASK 2 According to Warren Buffet, "Intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised. Two people looking at the same set of facts, moreover--and this would apply even to Charlie and me--will almost inevitably come up with at least slightly different intrinsic value figures." Warren Buffet is one of the richest men in the world. Research and summarise some interesting facts about Warren Buffet that you can relate to the companies you have selected from the Financial Review to analyse.[5/40 for content and knowledge] There are several YouTube featuring interviews and/or commentary by Warren Buffet about how to invest wisely. Below are three to get you started. Skip the ads, watch them and summarise the key points that he makes in relation to investment.

• Warren Buffet Best Advice on Successful Investing: https://www.youtube.com/watch?v=_5VQPIeZhMc
• Warren Buffet on Why He’ll Never Sell a Share of Coke Stock: https://www.youtube.com/watch?v=4p1_5bZ8I4M
• Warren Buffet Financial Rules to Live By: https://www.youtube.com/watch?v=gUAtVyWS_4Y

TASK 3

• Compare Warren Buffet’s approach to share valuation and the share valuation methodology in Week 6 - Chapter 10 and recommend which approach you prefer with one reason why.