MAF203 - Business Finance - Business Description - Risk and Return - Capital Budgeting - Finance Assignment Help

Assignment Task:

MAF203: Business Finance Assignment Help

Part I Business Description 
Choose one company from the below list. For your company answer the following question. The answers to the following questions can be found at the following link.

Type the ASX code of your company in the search box to find your company from the database.
1. What is the GICS Sector, GICS Industry Group and GICS Industry of your company? 

2. What is the total market capitalization of your company? 
 

3. In your own words describe the main business of the company. 

4. What is the market risk (beta) of your company? 

5. What is the market risk of the industry your company belong to? 

6. Is your company more or less risky than its industry counterpart? Explain in your own words.

7. What is the 5 year holding period return (total shareholder return on the Datanalysis webpage) for your company? 

8. How old is your company? 
 

Part II Risk and Return [45 marks] 900 words
1. For your chosen company in Part I of the assignment compute continuously compounded return using daily data. The data is provided under the Assignment under the Assessment folder.  Where ln means natural logrithim.

2. Compute Expected return,, for your company. 

3. Compute the standard deviation of the daily continuous return of your company.

4. Compute the (daily) return correlation coefficient between your company’s returns and market return. The market index prices are provide in the same dataset. The market index is named as “market”.

5. Using the correlation coefficient, comment on the return movement of your company and
the market in the specified date range. (2 marks). (50 words)

6. Compute the beta of your chosen company using the daily data provided. Do you see any difference in the beta you observed in Q4 of PART I? Explain why you see the difference.
 

7. Compute required rate of return of your company using CAPM model. Assume Australian 10 years government bond rate is 2.14% and market risk premium is 5.01%. Compare the required rate of return from CAPM with return you have calculated in  Question 2 of Part II. Explain clearly the difference in terms of if the stock is underpriced or overpriced.

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