CRICOS code 00025B
FINM 7401 Collections of Individual
Assignment Questions from Students
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v The file should cover the answers for most of your questions regarding the
assignment.
v Please note this file will be updated whenever there are common questions
asked so please check this file regularly.
v If you find your question is not answered, please email Ling Xiong
(z.xiong@uq.edu.au).
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1. Should I select a private firm or public firm?
Answers: A selection of public listed firm is preferred as private companies don’t have a highly restricted reporting standard and stock price data available
as public listed companies.
2. Do I need to submit an excel file for the data used?
Answers: Yes. Excel should include the financial data downloaded from any resource.
3. Do I need to provide the calculation process in the report?
Answer: Yes, you will need to provide the calculation process whenever is needed for all the questions. If you wish to use excel to do computation
questions, you will still need to show your calculation including formulas with numbers implemented in the written report to demonstrate your knowledge of
using related formulas.
4. Do I need to provide screenshots for the numbers cited from the database and excel sheet?
Answer: Yes, please provide screenshots and references (e.g. from “balance sheet”, “income statement” or etc.) for the numbers used in your calculation in
the written report. Otherwise, it will be hard to identify the source of the numbers.
5. Can I use data and resources from other databases, besides Captial IQ.
Answer: Yes, any data and resources can be used as long as you can supply them when submitting and take screenshots of the used parts in the report.
6. Do I need to have any reference? What style?
Answer: It is stated in the submission guideline that “Please provide references where appropriate”. APA reference style is preferred.
7. Should I convert the currency to AUD if financial numbers are provided in some other currency.
Answer: You need to convert the currency to AUD for simplicity and be consistent throughout your calculations and written report. The exchange rate
should be based on the information at the date of the end of that financial year.
General Questions
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Assignment Specific Questions
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2) Estimate the growth of the firm using the following three approaches.
Answers: You are expected to project the growth rate of the firm for the next year
(from 1 July 2021 to 30 June 2022)
6) Use dividend-discount model (DDM) to estimate the price per share of your selected
company.
Answers: You are expected to price the stock on 30 June 2021.
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Compute the cost of equity using the capital asset pricing model (CAPM). Compute the
cost of debt based on the yield to maturity (YTM) of the long-term corporate bonds.
Answers:
1. For the selection of risk free asset in order to apply CAPM, relying on either short-term
or long-term government bonds should be fine.
2. For the market expected return, you can form the calculation based on ASX200 index.
3. For how to derive the expected return, please refer to the discussion in share valuation
lecture.
4. Corporate bond information can be found in the “Fixed Income” section in Captial IQ
once you have navigated to the selected company. If no long-term corporate bond is
associated with the company, provide a screenshot to prove that in the report and please
use interest expense/total debt to represent the YTM.
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Provide an assessment on your selected company in terms of its valuation relative to its
competitor (at least two companies) within the same industry. Comparison can be done
using valuation multiples as discussed in the lecture.
Answers: I expect the report should include comparisons based on at least two multiples.