FINC2012 Semester 1 2025 Group Assignment
Due 16th of May 2025 (Week 11)
(Maximum word limit: 2,500 words)
Maximum Possible Marks: 25

You have been assigned as an independent external corporate finance advisory team whose
client is the Chief Financial Officer (CFO) of your assigned company.
Your assigned company will be one of the 6 ASX-listed companies listed in the table on the
next page and will be indicated by the respective company three-letter ASX code that
appears next to your Assignment Group Number on Canvas
Your task as a corporate finance advisory team is to review and assess your assigned
company’s capital structure going forward, Specifically, your team has been requested to
provide expert advice in relation to the following:
1. Key Capital Structure Considerations:
Drawing on relevant academic theory and the specific characteristics of the assigned
company, identify and discuss the key factors and commercial considerations that
should influence decisions regarding determination of the capital structure for the
company? [5 marks]
2. Comparative Capital Structure Analysis (2019–2024)
Examine and discuss how the capital structure trends of your assigned company, as
reported in its annual reports and financial statements in the financial years ending
in 2019 to 2024, compare to its peer companies? Compare these trends to those of
three peer companies, at the minimum focusing on the following key leverage
metrics:
i. net debt as a percentage of net debt plus equity (based on market values);
ii. the ratio of net debt to EBITDA. [6 marks]
3. Drivers of Leverage Differences Across Peers
To the extent that gearing/leverage varies across this peer group of companies,
what major economic/commercial factors appear to lead the companies to adopt
different capital structures? What insights does such a comparison provide to your
assigned company in considering its capital structure policy? [6 marks]
4. Capital Structure Recommendation
Based on the above analysis, provide a brief recommendation in relation to the
future capital structure policy of your assigned company. [5 marks]
Presentation and Report Quality
A maximum of 3 marks will be awarded for the overall presentation, structure, and
writing quality of the final report. Ensure clarity, conciseness, professionalism, and
logical flow throughout your submission. [3 marks]
TOTAL POSSIBLE MARKS: 25
ASX-Listed Companies
ASX Code Company Name GICS Sector
STO Santos Energy
JBH JB HiFi Consumer Discretionary
RIO Rio Tinto Limited Materials
COL Coles Group Ltd
Consumer Staples
Distribution & Retail
TWE Treasury Wine Estates Consumer Defensive
CSL CSL Limited Health Care
Please use the following mapping to find the assigned company to your group.
Group number last digit ASX Code Company Name
0 STO Santos
1 JBH JB HiFi
2 RIO Rio Tinto Limited
3 COL Coles Group Ltd
4 TWE Treasury Wine Estates
5 CSL CSL Limited
6 JBH JB HiFi
7 COL Coles Group Ltd
8 CSL CSL Limited
9 RIO Rio Tinto Limited
For example, if you are in Group 5, your assigned company is CSL.
If you are in group 63, you are assigned company is Coles.
If you are in group 139, your assigned company is Rio Tinto.




Please make sure that you utilise the extensive relevant databases available from the
University of Sydney Library. Specifically make sure to visit the following site containing
relevant information on ASX-Listed Companies:
https://www.library.sydney.edu.au/browse/market-intelligence


FAQs

1. What do I include in my submission?
You will need to submit ONE word document. This document should include the main body
of the report and if necessary, an Appendix.

2. Do I need to separate my responses with enumerated headings for each question?
Yes.

3. What are the most relevant dimensions for selecting peer firms?
Size and industry (or sector). E.g. you can look at firms in the same industry and find 3 peer
firms with the closest size (market capitalisation or total assets) to your firm.

4. Should I look at capital structure of the entire industry?
It’s recommended if you are a capable researcher (and good with Excel), but you should
concentrate only on the mean or median statistics.

5. Do I need to calculate other firm characteristics for the capital structure discussions?
You need to provide sufficient data to support your arguments.

6. How do I discuss if the company’s capital structure decisions are consistent with the
capital structure theories?
You need to understand the essence of these theories. What does each theory predict a firm
should do, given the firm’s specific characteristics? Are the actions you find and the leverage
trend you calculate consistent with what these theories predict?

7. What about off-balance sheet liabilities?
It’s your discretion but these would make the assignment too complicated.

8. Should I try to obtain credit ratings?
Not all firms are rated but it’s worth searching for ratings of both your allocated firm and
its peer firms. This provides you some information on expected bankruptcy costs.

9. Do I use book values or market values when calculating capital structure measures?
This is up to you. We expect you to provide reasons for your choice.

10. Should I analyse total liabilities or just focus on interest bearing debt?
This varies from one industry to another, but interest-bearing debt is more relevant to capital
structure theory.

11. Does the Appendix have word limit?
No.

12. Should I include an executive summary, introduction, or conclusion section?
No.

13. Are there penalties for paraphrasing and not citing the corresponding research papers?
Yes, this will most probably be red flagged by Turnitin and Academic Dishonesty team will
investigate your case.

14. Are there penalties for going over word limit?
There will be heavy penalties.

15. Is the Appendix or References included in the word count?
Both sections are not included in the word count.

16. Where is the marking rubric?
It is at the bottom of the same Canvas page as the assignment question.

17. It is recommended not to leave your submission time until the few minutes before the
deadline. Murphy's law tells us that technical issues tend to occur around that time.


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