Academic Writing 2

Assessment item 2 Report Writing Value: 20% Due date: 20-Apr-2016 Return date: 12-May-2016 Submission method options Alternative submission method Task This assessment task covers topics covered in week 1 to 6 and has been designed to ensure that you are engaging with the subject content on a regular basis. Task An overseas institutional investor has approached your investment advisory firm seeking to invest AUD280 million in one of the big local bank’s ordinary shares. Your Chief Investment Officer has done some preliminary research on the seven banks financial returns and current financial position that has helped her to narrow the choices down to two banks. You have been given the assignment to analyse and prepare a report as to which of the two banks' ordinary shares is better value for investment. Based on your market research (qualitative and quantitative) on BENDIGO AND ADELAIDE BANK and SUNCORP GROUP LIMITED, you are required to prepare a report with your recommendation to the Chief Investment Officer, as to which of the companies’ ordinary shares is better value for investment. The overseas investor desires high returns and growth and is looking to park the funds for long term i.e. 10 years. In your report, include all the calculations and market information on which your recommendation is based. Show all your calculations on the annexure. Limit your report between 1,500 to 2,000 words using financial theory and concepts. For this question you may use information provided in the below websites and any other sources you feel will assist you to come up with your recommendation. Yahoo! Finance [login to view URL] Australian Stock Exchange [login to view URL] Reuters [login to view URL] Bendigo and Adelaide Bank [login to view URL]!/BEN Suncorp Group Limited [login to view URL] Use RBS website Bank of Australia ABS(Australian Bureau of statistics) statistics Australian Bank of statistics As a minimum calculate the following to help you come up with a recommendation: • The required rate of return on ordinary shares of the above two banks using Capital Asset Pricing Model. • Ordinary share valuation – Constant dividend growth model. • Find the monthly holding period returns (%) for the period 01 July 2014 to 30 June 2015. The monthly holding period return is the percentage return you would receive if you bought an asset on the first day of the month (opening price) and sold it on the last day of the month (closing price). Graph your results on one graph with returns on the y axis and time on the x axis. (Use ‘Close’ rather than ‘Adjusted Close’ for the selling price and ignore any dividends. Guidelines: • Base your calculations on the most recent financial results ending 30 June 2015. Rationale This report writing will provide an opportunity to apply the concepts in an authentic scenario that you may encounter in the workplace and also: · be able to demonstrate appropriate communication skills in the context of corporate finance. · be able to demonstrate specific technical competencies and skills in utilizing quantitative techniques in financial analysis. · be able to critically evaluate mainstream financial theory and concepts