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The University of Sydney
Finance Discipline

FINC 5001
Foundations in Finance

Major Assignment (Weighting: 25%)

Final Report Due Date: by 5pm, Monday 18th February, 2022

# Group members: 3 to 5


The impact of price-sensitive announcements on an ASX listed firm

This group assignment requires you to reflect upon what you have learnt during
the unit about the theory investors respond to the release of announcements by
publicly listed companies. Furthermore, you will be required to undertake some
empirical calculations to test that theory.

For this task your group is required to select ONE (1) company listed on the
Australian Securities Exchange (ASX). The company chosen by your group must
have been listed on the ASX for a period of not less than six years.

Once your group has chosen a suitable company you are then required to
undertake the following tasks.

Requirement:

1. Identify FOUR (4) public announcements made by your chosen company
within the period 1st January 2020 through to 31 December 2021. The
announcements should be ones that would be expected to have an impact
upon the company’s share price following the release of the information.
Provide a brief summary of key content of each of those announcements and
explain why you think each announcement should have an impact upon the
company’s share price.

2. Using data from your company calculate its beta. Using suitable academic
literature, justify your data choices with respect to time horizon, measurement
interval, measurement of returns, and market index.

3. Using the beta value you have calculated, apply the Capital Asset Pricing
Model (CAPM) to determine the daily abnormal returns for a period of FIVE
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(5) trading days before and TEN (10) trading days after each of your
chosen company announcements.
4. Analyse the response of the market to the release of these announcements
with reference to the efficient market hypothesis. Do the results indicate the
information contained in the announcements has been swiftly incorporated
into the share price? Ensure you support your conclusions with reference to
appropriate academic literature.

Additional Requirement:

Your report MUST include a sample of the data you have used in your
calculations together with a copy of the spreadsheet with the formulas rather than
the values on the cells. These must be in the appendix of the assignment.


Assessment Criteria:

o Conforming with instructions (e.g. word length, font, other instructions)
o Presentation, communication & style (written)
o Clarity of expression (incl. accuracy, spelling, grammar, punctuation)
o Referencing
o Use of literature/ Knowledge of theory
o Data/information gathering/processing
o Conclusions
o Analysis
o Problem solving
o Originality

Your assignment is heavily weighted towards research into relevant academic
literature. Ensure that you refer to the source documents to justify selection of
variables and in your discussion of the corporate announcements.


Formatting and Presentation:

1. The assignment should be no more than 10 pages, with 1.5 line spacing and
size 12 Times New Roman Font. You may use smaller font for the
presentation of your Excel spreadsheets. Marks will be reduced by 10% for
each page that the assignment exceeds 10 pages. Hence your mark will be
reduced to zero if the assignment exceeds 20 pages. Brevity and conciseness
are key ingredients of a highly successful report. You will be penalised for
inappropriate formatting.
2. Make sure you use proper referencing in your assignment. The referencing
style you choose to use must be consistent throughout your report. You will
be penalised if references are used inconsistently throughout the report.






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3. Pay particular attention to presentation. A component of your mark will be
based on presentation. Avoid overdoing formatting, and ensure that the
assignment is very clear, logical and professional. Pay attention to grammar.
Clear and logical presentation is a major challenge in assignment preparation.
Preparing a concise assignment is another major challenge. Every part of the
assignment should somehow add to the end result – determining an
appropriate share price - otherwise it is superfluous and distracting.
4. The report must be submitted as a PDF document. You must submit the
report electronically


Page limit for assignment – 10 pages

What’s included in the 10 page limit?
- Executive summary
- Assignment body
- Tables
- Diagrams

What’s excluded from the 10 page limit?
- Title page
- Table of contents
- Reference list
- Appendices