General Rules and Requirements:
The report should be prepared in a group (each group should have a minimum of three or a maximum of five students). Word limit is 2,500 words. Font type – Times New Roman (size 12), paragraph spacing – 1.5. Assignments should be submitted electronically via Turnitin on www.moodle.com.au.
This must include:
Name of the Institute (Top Education Institute) The assignment title
The name and code of the unit
Full details of the students who prepared the report (official names and student numbers)
The due date of the report
Full name of the unit coordinator
Table of Contents
Final report should include the list of the headings and appendices. It is vital to double-check that the correct page numbers are shown opposite each section of the report.
In the introduction section, you should provide enough details about the purpose of the report, key tasks and generally what the report will cover.
Answers to questions should be organised under appropriate headings and sub-headings. It is vital to include analysis of the sources you are using to answer the questions and report on your research findings.
In the final section of the report, you are expected to summarise all the main points of the report. You will need to list all the findings that are directly linked to the objectives of the report.
Includes a full list of references you have used to complete your report. Please follow a Harvard style system of referencing.
Failure to adhere to these format requirements will attract a deduction of 2 points from the total mark.
Each appendix normally includes tables, figures, annual financial statements, which are too detailed for them to be included in the body of the report. Appendices are placed at the very end of the report. Each appendix should have a separate number.
?Case Study #
The investment bank your group works for has been hired by the Board of Directors of the company assigned to your group to perform analyses of the company s capital structure and to provide advice on whether the current capital structure is optimal. Since, your group will report directly to the Board of Directors, you can assume Financial Management level knowledge of finance.
Your group s assigned task is to produce a report on the capital structure of the company assigned to your group. In the report, you should analyse the capital structure of the assigned company following the guidelines provided below.
In your report, you must apply the theories and concepts discussed in class to the facts of the firm assigned to your group. The report should demonstrate your understanding of the theories and their practical implications.
COMPANY AND INDUSTRY OVERVIEW
Provide a brief summary of the firm s business activities and business segments and recent developments in the company and its industry. Identify two comparable firms, which you will use in your analyses in the next section. You should fully justify your choice of the comparable firms.
CAPITAL STRUCTURE ANALYSIS
In this section you will analyse the company s capital structure and leverage policy. Your discussion in this section should include but not be restricted to the following:
HISTORICAL COMPANY LEVERAGE/FINANCING ANALYSIS AND PEER/INDUSTRY LEVERAGE ANALYSIS
You should document the financing and leverage history of the company and characterise the company s historical (and current) leverage policy using:
? Recent trends in the use of debt and equity and recent financing activities of the firm (debt and equity issues, placements and share buybacks); current and recent history of leverage and interest coverage ratios; management discussions about the firm s leverage policy.
? Does the company have a target leverage ratio?
? Discuss recent capital expenditures (including mergers) and their financing.
? Is the financing behaviour of the company consistent with the pecking order theory? You should document and discuss the firm s leverage policy relative to the leverage policies
of comparable firms.
OPTIMAL LEVERAGE ANALYSIS
You should discuss the implications of the various capital structure theories for optimal capital structure as they apply to your assigned company including:
The trade-off between tax benefits of debt (including personal taxes and dividend imputation credits and the financial distress costs