BUS3059M Financial Management for Business Main Assessment (Rolls-Royce case)
This assignment contributes to and/or requires the highlighted module outcomes
Describe the role of Modern Finance Theory.
Analyse the tenets of Efficient Market Hypothesis
Discuss the viability of investment projects and critique various methods of investment appraisal
Critically discuss the role of capital markets and instruments with relation to the firm.
Discuss different approaches to Valuation of Securities
Calculate and analyse risk and Return
Analyse the principles of diversification
Discuss pricing of securities and security market line/capital pricing line
Discuss the benefits of debt vs. equity decisions and factors affecting capital structure
Analyse the dividend policy of the company
Discuss valuation, benefits and difficulties in a merger process
Valuation of simple options, description of forwards and future markets
Choose ONE of the following companies
Rolls-Royce Holdings plc; ITV plc;
You will find their latest report and accounts on Blackboard, aligned with this assignment.
You do not need to either print out the whole report, or attach the report to the assignment.
You may find it useful to print certain key pages for you own reference, but these do not need to be included with the assignment submission.
Answer ALL of the following questions, relate your answers to your chosen company, but do not feel restricted to only this company, there will be marks available for evidence of considered research, latest company information and wider thinking together with relevant referencing to current events. Ensure you include a bibliography of texts and articles referenced.
Your assignment should take the form of
An informative REPORT to the newly appointed Human Resources Director of the company that you have
chosen, assuming that they have minimal financial knowledge. Your report should be designed to inform the
new director of both the theoretical and the practical approach to these areas of finance.
(A) Corporate funding structure (1000 words) (35% of total mark for assignment)
Discuss the different methods that companies can use to fund their long term viability, the restrictions on these methods,
and why many analysts view this as evidencing the ‘real’ ownership of a company? Align your comments to the company
you have chosen above.
(B) Market efficiency (850 words) (30% of total mark for assignment)
Challenge what is meant by an efficient market, and when and if such a phenomenon ever occurs, include a discussion
of the Efficient Market Hypothesis, the movement of the FTSE100 during 2015/2016, and the share price movement of
the company you have chosen above.
(C) Valuation (650 words) (25% of total mark for assignment)
Critically appraise the use of the ‘balance sheet’ as a means of valuing a company and compare this with one alternative
method that might be used by shareholders; illustrate the concepts and the values with at least the company you have
chosen above.
10% of the total mark is available for professionalism, presentation and evidence of breadth of reading and thinking –
but remember this is an electronic document!
A word count must be shown on the assignment submission.
Please explain and reference the sources of your data and outline any assumptions which have been made.