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Instruction Students have to answer task 1, and two out of three other tasks, and provide the procedure of workings

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Instruction

Students have to answer task 1, and two out of three other tasks, and provide the procedure of workings.

• Each student is assigned a listed company on London Stock Exchange (Please check the Canvas)

• Word limit of this assignment is (1400 - 1500) words excluding references and tables.

Task 1: Project Appraisal

Magnolia-hardware company is considering expanding its highly successful online game franchise to the ”Board Game” or ”Trading Cards” environment. The company has decided that it will invest in one project but not both. Consider the following cash flows of the two mutually exclusive projects. Assume the discount rate for Magnolia-hardware is 8 per cent.

1.Calculate the payback period and discounted payback period of these two projects. [10 marks]

2.Calculate the NPV of these two projects. [10 marks]

3.Draw the NPV profile of these two projects in the same graph. [10 marks]

4.Considering the above results, explain critically which project do you choose? [10 marks]

Task 2: Investment Opportunities

Mr Adam is 25-year old. He recently received £25,000 from his parents and wants to invest this fund for at least 20 years. He has a job with saving of£500 per month. He comes to you as his financial advisor seeking for investment advice.

1.Provide a list of potential investments opportunities for Mr. Adam. [15 marks]

2.Considering his age and financial condition, what is your financial advice? [15 marks]

Hint: consider different investment options in money and capital market.

Task 3: Cost of Capital

The activities of Tesco are financed by both debt and equity.

You are required to collect the following information and calculate the weighted average cost of capital (WACC) of Tesco.

• Market Cap of Tesco. [5 marks]
• What is the weighted average cost of capital (WACC) of Tesco? (Hint: according to IG market, the average of recent yearly returns of FTSE100 as proxy of UK market is 7.5%; UK corporate tax rate is 19%). [10 marks]

2.Long-term Debt of Tesco. (From the recent released balance sheet of company) [5 marks]

3.Beta of Tesco as measure of systematic risk. [5 marks]

4.10-year Bond rate of UK government as proxy of risk-free rate.

Task 4: Risk and Return

Extract the weekly price of assigned company to you and FTSE250 for one year and show the results of the following items:

1.Show the weekly return of the company and FTSE 250 in the same graph. What is your interpretation of the change of return of the companycomparing with the market index? [15 marks]

2.Calculate the weekly standard deviation and return for both the company and FTSE 250. What is your interruption of the risk and return ofthe company comparing with the market index? [15 marks

 

Student Attendance Details Academic Year : Spring 2020-21 Lecturer Name : SHOBHNA GUPTA Program Name : BSC-B&M-S1 MB-1 Subject Code : Subject Name : AFE4004-B1 INTRODUCTION TO FINANCE Batch : BSC-B&M-S1 MB-1(Spring2020-21) Student Name Assigned Companies for Coursework Ticker Name S. No. Student ID 1 ST10233 Al Muntaser Adnan Ahmed Abdullah Al Ansari UTG UNITE GROUP PLC ORD 25P 2 ST10384 ANWAR MAHMOUD LAL BAKHSH AL BALUSHI VTY VISTRY GROUP PLC ORD 50P 3 ST10210 BADER FAWAZ DIAB TBCG TBC BANK GROUP PLC ORD GBP0.01 4 ST10305 hanan abdulhafeeedh othman noorak albalushi IPO IP GROUP PLC ORD 2P 5 ST10308 Jad Mohammed Khaled Nuhad Elassaad BRWM BLACKROCK WORLD MINING TRUST PLC ORD 5P 6 ST10645 Kenneth Paul Franklin JUP JUPITER FUND MANAGEMENT PLC ORD 2P 7 ST10367 khaloud mohammed khalid mohammed alharthi EVR EVRAZ PLC ORD USD0.05 8 ST09955 KUMAIL SHAKIR MOHAMMED ABDULLAH AL LAWATI NEX NATIONAL EXPRESS GROUP PLC ORD 5P 9 ST10537 Rashid Al-kalbani HL. HARGREAVES LANSDOWN PLC ORD 0.4P 10 ST10640 Sabha Sheik ANTO ANTOFAGASTA PLC ORD 5P 11 ST10683 shama tanwar mohammed arif RDW REDROW PLC ORD 10.5P 12 ST10427 13 ST10426 THURAIYA RASHID SAIF MOHAMED AL MARDHUF AL RMV SAADI THURAIYA KHALID ABDULLAH AL KHALILI TCAP RIGHTMOVE PLC ORD 0.1P TP ICAP PLC ORD 25P Student Attendance Details Academic Year : Spring 2020-21 Lecturer Name : SHOBHNA GUPTA Program Name : ACCT&FIN-S1 MB-2 Subject Code : Subject Name : AFE4004-B1 INTRODUCTION TO FINANCE Batch : ACCT&FIN-S1 MB-2(Spring 2020-21) Student Name Assigned Companies for Coursework Ticker Name S. No. Student ID 1 ST10177 ABDULLAH TALAL MOHAMMED AL RASHDI KGF KINGFISHER PLC ORD 15 5/7P 2 ST09838 ABDULMALIK HASHIM MOHAMMED ALBALUSHI JDW WETHERSPOON(J.D.) PLC ORD 2P 3 ST10678 Alshaimaa ISSA ABDUALLH Alwahibi FUTR 4 ST10218 Ammar Nasser Juma Mohammed Albalushi MONY 5 ST09963 ANOUD KHALID ALI AHMED ALHOOTI RMG FUTURE PLC ORD 15P MONEYSUPERMARKET.COM GROUP PLC ORD 0.02P ROYAL MAIL PLC ORD 1P 6 ST10248 AZIM JAFFER HUSSAIN CRH CRH PLC ORD EUR 0.32 7 ST10095 BASEL MARWAN YOUSEF AL KANAFSEH PAG PARAGON BANKING GROUP PLC ORD 100P 8 ST10267 Basma sulaiman juma mohammed Al Farsi RIO RIO TINTO PLC ORD 10P 9 ST10317 Firdhouse Khalid Saif Saud Al Jabri SSPG SSP GROUP PLC ORD 1 17/200P 10 ST10089 HANAN SAAD TPK TRAVIS PERKINS PLC ORD 10P 11 ST10216 Layan Humaid Rashid Saleh Al Muhaidhri WPP WPP PLC ORD 10P 12 ST10364 MAATHER HUMOUD HAMID NASEER ALZAKWANI INVP INVESTEC PLC ORD GBP0.0002 13 ST10867 Momuin Iqbal DGE DIAGEO PLC ORD 28 101/108P 14 ST10268 Nutaila yahya Mohamed Al Shidhani JD. JD SPORTS FASHION PLC ORD 0.25P 15 ST10443 OMAR MUKHTAR QURASHI MUKHTAR LGEN LEGAL & GENERAL GROUP PLC ORD 2 1/2P 16 ST10622 Pratham Girish Arware CEY CENTAMIN PLC ORD NPV (DI) 17 ST10215 Radhika Goel BT.A BT GROUP PLC ORD 5P 18 ST10254 Ruaa Sultan Salim Said Alhabsi SMDS SMITH (DS) PLC ORD 10P 19 ST10619 Simran Riaz Shaikh BEZ BEAZLEY PLC ORD 5P 20 ST10306 ZAMZAM SIBTAIN SIBTAIN SMIN SMITHS GROUP PLC ORD 37.5P Student Attendance Details Academic Year : Spring 2020-21 Lecturer Name : SHOBHNA GUPTA Program Name : ACCT&FIN-S1 MB-1 Subject Code : Subject Name : AFE4004-B1 INTRODUCTION TO FINANCE Batch : ACCT&FIN-S1 MB-1(Spring 2020-21) Student ID S. No. Student Name Assigned Companies for Ticker Name 2 1 ST10339 AHMED NASSER RASHID AL ARAIMI HOC HOCHSCHILD MINING PLC ORD 25P 3 2 ST10232 Al buraq Hamood AL HARTHY VMUK VIRGIN MONEY UK PLC ORD GBP0.10 4 3 ST10338 AL MUTAZ RASHEED AL SAFI KHAMIS AL HURAIBI CPI 6 4 ST10340 ali saleh abdullah saleh albahrani IAG 7 5 ST10237 amna ali hassan mohammed al mujaini MAB CAPITA PLC ORD 2.066666P INTL CONSOLIDATED AIRLINES GROUP SA ORD EUR0.10 (CDI) MITCHELLS & BUTLERS PLC ORD 8 13/24P 8 6 ST10348 Amna Nabil Mohamed FXPO FERREXPO PLC ORD 10P 9 7 ST09873 ARWA MOHAMMED ALI DUBLLAN JABOOB IWG 10 8 ST10844 ATIYA THASEEN AML 11 9 ST09850 ELAF AHMED KHALFAN SAID AL HASANI CPG IWG PLC ORD 1P ASTON MARTIN LAGONDA GLOBAL HOLDING ORD GBP0.00903968713304439 COMPASS GROUP PLC ORD 11 1/20P 12 10 ST10341 Eyad Ali Mohammed Salim Al Riyami PFC PETROFAC LD ORD USD0.02 13 11 ST10301 FATMA HAMOOD AHMED AL HINAI SMWH WH SMITH PLC ORD 22 6/67P 14 12 ST09887 HAIFA ABDULMAJEED YOUSUF KHUDDADAT AL BALUSHI ITV ITV PLC ORD 10P 15 13 ST09851 HAIMA AHMED KARAM ABDULRAHMAN AL- BALUSHI FRAS FRASERS GROUP PLC ORD 10P 17 14 ST10249 Hamed Mandher Hamed AL MUKHAININ NWG NATWEST GROUP PLC ORD 100P 18 15 ST10488 ilham sabil abdullah al balushi CCL CARNIVAL PLC ORD USD 1.66 19 16 ST10616 JANNATUL NAIYEM LLOY 20 17 ST09897 KHADIJA KHALID MOHAMMED ALMEER ALBULUSHI BKG 22 18 ST10474 Maathir Mahmood Saleh Al Balushi RR. LLOYDS BANKING GROUP PLC ORD 10P BERKELEY GROUP HOLDINGS (THE) PLC ORD SHS 5P ROLLS-ROYCE HOLDINGS PLC ORD SHS 20P 23 19 ST10362 manar said rashid abdullah almaani CCL CARNIVAL PLC ORD USD 1.66 24 20 ST10346 MOHAMMED RASHID ALI AL WAHAIBI AAL ANGLO AMERICAN PLC ORD USD0.54945 25 21 ST10352 mohammed samir mubarak saeed AL_alawi SN. SMITH & NEPHEW PLC ORD USD0.20 26 22 ST10548 Moosa Salim Moosa Al Mayahi HSBA HSBC HLDGS PLC ORD $0.50 (UK REG) 27 23 ST10366 NASSER SABAH HASSAN AL LAWATI PFG PROVIDENT FINANCIAL PLC ORD 20 8/11P 28 24 ST10304 Noor Hassan Talib Abdullah Al Lawati MGGT MEGGITT PLC ORD 5P 29 25 ST10363 RAIYAN MOHAMED SLEYIM AL-SHUELLY POLY POLYMETAL INTERNATIONAL PLC ORD NPV 30 26 ST10246 rayyan masaud humaid omer al khusaibia GLEN GLENCORE PLC ORD USD0.01 31 27 ST10865 Rehaab Rizwan Kazi TW. TAYLOR WIMPEY PLC ORD 1P 32 28 ST10345 RINAD NASSER MUBARAK KHAMIS AL MAZRUI WTB WHITBREAD PLC ORD 76 122/153P 33 29 ST10618 Rithanya Sanjeev Kumar Padmanabhan STAN STANDARD CHARTERED PLC ORD USD0.50 34 30 ST10337 SAEED MUHAD MUBARAK ALMASHIKHI RDSB ROYAL DUTCH SHELL PLC 'B' ORD EUR0.07 35 31 ST10182 Said Saleh Nasser Mohamed Al-Naamani PRU PRUDENTIAL PLC ORD 5P 36 32 ST10221 SAOUD SAIF SAOUD AL MANJI RDSA ROYAL DUTCH SHELL PLC 'A' ORD EUR0.07 37 33 ST10217 SARA AZIZ AMUR AL RASHDI CRST 38 34 ST10621 Shagufta Rauf Sheikh PSH 39 35 ST09937 SHAIMA AHMED KARAM ABDULRAHMAN AL-BALUSHI CINE CREST NICHOLSON HOLDINGS PLC ORD 5P PERSHING SQUARE HOLDINGS LTD ORD NPV CINEWORLD GROUP PLC ORD 1P 40 36 ST10335 Sharifa Saeed Nasser Saeed Al Mughairi BP. BP PLC $0.25 41 37 ST10357 Sultan Sadiq Mohamed Al-Zaabi BHP 42 38 ST09813 TAMANI ALI MUTHANNA ALI BRSC 43 39 ST10332 WADHHA KHALFAN SALIM AL WARDI PSN BHP GROUP PLC ORD $0.50 BLACKROCK SMALLER COMPANIES TST PLC ORD 25P PERSIMMON PLC ORD 10P 44 40 ST09862 Abdul Lateef Abdullah FRES FRESNILLO PLC ORD USD0.50 1. Link for FTSE 250 - Historical prices https://uk.finance.yahoo.com/quote/%5EFTMC%3FLTR%3D1/history/ 2. Links to Recorded Coursework Instruction Session Task – 1 https://bradford-ac-uk.zoom.us/rec/play/3bUo8JZlmGghqXRD2xrrDfUmbY5Cp_WhbBgNKdQCm54IqPpY6pMjPFm7hyvX_HyrxkKRZUxDCAIbV9x.gkdKNOuwgcaN3EZ7?startTi me=1616423399000&_x_zm_rtaid=4LR6o9u0T2WnriRsHrE82Q.1617037080507.d967d7284fdd9f29909 54a1a8d7c95d3&_x_zm_rhtaid=178 Task 2 https://bradford-acuk.zoom.us/rec/play/ieMC_tG2dPV5vzpHK8IH6OIHV22cl6uWilYMC7Rb4XfOiNdB84rpjl9H7E2rLkmeOCR 5Zk9H9SAIo1bd.Mc_4IE8GeK2tQ3t?startTime=1616424206000&_x_zm_rtaid=4LR6o9u0T2WnriRsHrE82Q.1617037080507.d 967d7284fdd9f2990954a1a8d7c95d3&_x_zm_rhtaid=178 Task 3 bradford-ac-uk.zoom.us/rec/play/zU2FH2BkjCKVoij4IYTilRx005GLvJ5vs3BE3EFU5ysD5pzi8IH9BjFT7sPjQb7hzEBcONZPcR7xaRM.deOvKCTf9SIHXqm?startTime=1616424447000&_x_zm_rtaid=4LR6o9u0T2WnriRsHrE82Q.1617037080507.d967d7284 fdd9f2990954a1a8d7c95d3&_x_zm_rhtaid=178 Task 4 https://bradford-ac-uk.zoom.us/rec/play/hnljenRgU7lQYgfqS29YpnArZTMunFDYlmsWoGPzkkZEd3HkEtKqkeKZsWCsI7v5dQqgpmaTQOQLUnE.D4G 1iQUtNzYGkKl?startTime=1616424775000&_x_zm_rtaid=4LR6o9u0T2WnriRsHrE82Q.1617037080507.d967d7284fd d9f2990954a1a8d7c95d3&_x_zm_rhtaid=178 Lecture 8 – CAPM – UOB- Question 4 of coursework https://bradford-ac-uk.zoom.us/rec/play/_4Tv8Yc8NeLNRDMYCctbFk76roxUXudnC3FlEadeuzBA4j3JfTlIDG4Pega60c3YGFmSecJK0RTDoEZ.Ca9vr3qtifHH6td?startTime=1616407215000&_x_zm_rtaid=TOK23sZNTY4wm75EIWSrw.1617170441888.f3d98ab3e312f8c37ab9ebce33c12e52&_x_zm_rhtaid=491 AFE4004 - Coursework 2 Dr Mahdi Mousavi March 19, 2021 Abstract This assignment is designed to assess understanding of related learning objectives (LOs) of module AFE4004. This assignment accounts for 50% of the total marks available for this module. There are four separate tasks defined for this assignment which should be completed by students. Instruction • Students have to answer task 1, and two out of three other tasks, and provide the procedure of workings. • Each student is assigned a listed company on London Stock Exchange (Please check the Canvas) • The deadline for this coursework will be announced on Canvas • Word limit of this assignment is 1500 words excluding references and tables. Note that this is a maximum not a target. • All students need to be aware that the current rules and regulations on plagiarism prescribed by the University apply and you are advised to become fully familiarised with their content before starting your preparation. • This assignment should be submitted in word format through Canvas. • The submitted assignment will be checked by Turnitin for similarity. 1 Task 1: Project Appraisal [40 marks] Magnolia-hardware company is considering expanding its highly successful online game franchise to the ”Board Game” or ”Trading Cards” environment. The company has decided that it will invest in one project but not both. Consider the following cash flows of the two mutually exclusive projects. Assume the discount rate for Magnolia-hardware is 8 per cent. Year Trading Cards Board Game 0 1 2 3 4 -300 200 150 100 50 -1800 1000 350 500 500 1. Calculate the payback period and discounted payback period of these two projects. [10 marks] 2. Calculate the NPV of these two projects. [10 marks] 3. Draw the NPV profile of these two projects in the same graph. [10 marks] 4. Considering the above results, explain critically which project do you choose? [10 marks] Task 2: Investment Opportunities [30 marks] Mr Adam is 25-year old. He recently received £25,000 from his parents and wants to invest this fund for at least 20 years. He has a job with saving of £500 per month. He comes to you as his financial advisor seeking for investment advice. 1. Provide a list of potential investments opportunities for Mr. Adam. [15 marks] 2. Considering his age and financial condition, what is your financial advice? [15 marks] Hint: consider different investment options in money and capital market. Task 3: Cost of Capital [30 marks] The activities of Tesco are financed by both debt and equity. You are required to collect the following information and calculate the weighted average cost of capital (WACC) of Tesco. 1. Market Cap of Tesco. [5 marks] 2. Long-term Debt of Tesco. (From the recent released balance sheet of company) [5 marks] 3. Beta of Tesco as measure of systematic risk. [5 marks] 4. 10-year Bond rate of UK government as proxy of risk-free rate. [5 marks] 5. What is the weighted average cost of capital (WACC) of Tesco? (Hint: according to IG market, the average of recent yearly returns of FTSE100 as proxy of UK market is 7.5%; UK corporate tax rate is 19%). [10 marks] 2 Task 4: Risk and Return [30 marks] Extract the weekly price of assigned company to you and FTSE250 for one year and show the results of the following items: 1. Show the weekly return of the company and FTSE 250 in the same graph. What is your interpretation of the change of return of the company comparing with the market index? [15 marks] 2. Calculate the weekly standard deviation and return for both the company and FTSE 250. What is your interruption of the risk and return of the company comparing with the market index? [15 marks] 3