2201AFE – Corporate Finance

Assessment Task 2: Case Study Assignment

Griffith University

Trimester 1, 2026

Total Marks: 100; Weighting: 50%

Assessment Description

This assignment has two parts. Part A requires analysis of a selected ASX 300 company from corporate governance and risk-return perspectives. Part B involves a business-style report recommending between two mutually exclusive projects. Use recent data (at least 3 years up to December 2025). Submit one Excel file for calculations and one Word file for the report. Word limit: 2,000 for Part A, 1,500 for Part B (excluding graphs/tables). Due: 11:59 pm Sunday Week 12 via the submission portal. Individual assignment.

Part A: Company Analysis (60 marks)

Select a public firm from the ASX 300 (excluding TPG). Register your choice via the provided Google Doc; no duplicates allowed. Analyse from: (1) Corporate governance; (2) Risk and return of shares.

1. Brief company description.
2. CEO details: Name, compensation (salary/bonus/options), equity ownership.
3. Board of Directors: Members, tenure, remuneration, independence, other connections, external CEO roles, stockholdings.
4. Financial Market: Stock trading/holding, analyst coverage, volume.
5. Societal Constraints: CSR approach, corporate citizen reputation.
6. Share Price Analysis:
   1. Stock beta (3 years weekly returns vs. ASX 300 to Dec 2025); discuss sensibility.
   2. Cost of equity (CAPM; Rm-Rf=6%, Rf=10-year bond yield).
   3. Intrinsic value (1-stage/2-stage DDM using 5-year DPS; g=10-year bond yield in equilibrium); compare to Nov 2025 price; buy/sell recommendation.
   4. Announcement effect (2019-2025 event); expectation, cumulative returns graph (±1 month daily), adjustment speed vs. theory.
   5. Graph 3-year performance vs. competitor/market.

Part B: Project Investment Decision (40 marks)

Role: Financial analyst at Multi-chem, chemicals producer expanding into dyes/rubber/water treatment.

Scenario: Recommend between Manila (Philippines) or Cairns (Australia) plants for furfural production (10-year life).

Manila: Land $2.8m, buildings $14.5m, equipment $6.5m (2026). NWC change 4% sales annually (reverse Year 10). Sales $52m 2027 +10% p.a. COGS 65% sales. Fixed costs $12.5m 2027 +5% p.a. Depreciate straight-line to zero. Buildings salvage 20%, equipment none. Site sale $19.5m end. Tax 25%.

Cairns: Modify idle plant (forego $80k annual lease). Buildings $16m, equipment $5.5m (2026). NWC as above. Sales $48m 2027 +7.5% p.a. COGS 75%. Fixed costs $5.5m 2027 +5% p.a. Depreciate as above. Buildings salvage 30%, equipment none. Reverts idle end. Tax 30%.

Task: Report to CFO recommending project/if any. Support with calculations. Cost of capital: 12.5% domestic, 16% international.

Marking Criteria

• Part A: Governance depth/accuracy (20 marks), Beta/cost equity (15 marks), Valuation/recommendation (15 marks), Announcement/graph (10 marks).
• Part B: Calculations (18 marks), Report/recommendations (16 marks), Presentation (6 marks).

Submission Guidelines

Excel for workings, Word for report. Harvard referencing, min. 10 sources. Plagiarism checked.

Sample Answer Content: The CEO’s compensation structure aligns interests through equity but risks short-term focus if bonuses dominate. Board independence appears strong with few internal ties, supporting effective oversight per ASX principles. Societal constraints show robust CSR via sustainability reports, enhancing reputation. Share beta of 1.2 indicates market sensitivity, with CAPM yielding 8.5% cost of equity (Brealey et al., 2024, available at https://www.mheducation.com/highered/product/principles-corporate-finance-brealey-myers/M9781264080946.html). Two-stage DDM suggests undervaluation, recommending buy based on growth projections.

References

• Brealey, R.A., Myers, S.C. and Marcus, A.J., 2024. Fundamentals of corporate finance. 11th ed. New York: McGraw-Hill Education. Available at: https://www.mheducation.com/highered/product/fundamentals-corporate-finance-brealey-myers/M9781260772395.html.
• Damodaran, A., 2023. Investment valuation: Tools and techniques for determining the value of any asset. 4th ed. Hoboken: Wiley. Available at: https://doi.org/10.1002/9781119627449.
• Graham, J.R. and Harvey, C.R., 2022. ‘The theory and practice of corporate finance: Evidence from the field’. Journal of Financial Economics, 145(2), pp.567-589. Available at: https://doi.org/10.1016/j.jfineco.2021.05.012.
• Petty, J.W., Titman, S., Keown, A.J., Martin, P., Martin, J.D. and Burrow, M., 2025. Financial management: Principles and applications. 9th ed. Melbourne: Pearson Australia. Available at: https://www.pearson.com.au/9780655704867.
• Ross, S.A., Trayler, R., Hambusch, G., Westerfield, R.W. and Jordan, B.D., 2026. Fundamentals of corporate finance. 13th Asia-Pacific ed. Sydney: McGraw-Hill Education. Available at: https://www.mheducation.com.au/fundamentals-of-corporate-finance-9781760424985-aus-group.