In addressing the requirements below, each group should review the financial and annual reports of JB Hi-Fi Limited (ASX code: JBH)

In addressing the requirements below, each group should review the financial and annual reports of JB Hi-Fi Limited (ASX code: JBH). Assignment requirements are:

1. Provide a brief historical overview of JBH (5%)

2. Describe the current business activities of the company (5%)

3. Describe the company’s capital structure. This should include a discussion of the recent financial history and the identification and description of any changes in the capital structure that have occurred, or which are planned, preferably linking these to the discussion in parts 1 and 2 above.  (5%)

4. What were the major debt and equity instruments that the company had outstanding for the past five financial years (2015-2019)? Describe their key terms of issues.  (7.5%)

5. Analyse the past and present dividend policy of the company for the last five years (2015-2019).  (7.5%)        

6. Use the Capital Asset Pricing Model (CAPM) to estimate the cost of ordinary equity for the company. Explain any assumptions you make and identify the source(s) of any other information used in your calculations. (10%)

7. Calculate the company’s Weighted Average Cost of Capital (WACC).  Explain any assumptions you make and identify the source(s) of any other information used in your calculations.    (10%)

Assessment criteria (note: these are not equally weighted):

• The scope, depth and relevance of analysis and research
• Accuracy and up-to-date information used
• For Questions 6 and 7, reasonableness of assumptions made and quality of support including referencing the sources of information for assumptions will be considered.
• Application of appropriate techniques
• The timeliness of the submission
• The extent to which the specific requirements have been met
• In relation to the structure, formatting, presentation, expression, punctuation and spelling:
  • • Consistency of formatting
    • How clear and easy to follow the submission is for the reader
    • How the various parts of the assignment have been prioritised and integrated
    • Aesthetic impact (i.e.: how good it looks!)
    • Clarity of expression
    • A high standard is expected in terms of spelling and grammar (use of the spell check function and a careful proof read should minimise any problems in this regard).