BAFI 3257 – Corporate Financial Management

Corporate Financial Management

School of Economics, Finance and Marketing Master of Finance

BAFI 3257 – Corporate Financial Management

ASSESSMENT TASK 3 – INDIVIDUAL ASSIGNMENT

Semester 1 – 2021

Marks

  • This assignment is marked out of 100 and contributes 50% to the overall assessments.

Due Date

  • Your report must be submitted via Turnitin/Canvas by 11:59 PM (Melbourne time) on the due date Friday 11th June 2021.
  • Late submissions where special consideration has not been granted will be penalised. Please go through the course guide to understand the implications.

Submission Instructions

  1. Go to the following link to download RMIT’s Assignment Cover Sheet, fill in your details and attach it to the front page of your Word document. https://www.rmit.edu.au/students/student-essentials/forms/assessment-forms
  2. Save a PDF version of your document with file name saved in the following format: StudentID_BAFI3257.pdf (e.g., S1234567_BAFI3257.pdf).
  3. Upload the PDF file to the Turnitin/Canvas submission link.

Objective

In this assignment, you are required to apply techniques and concepts acquired in this course to analyse and provide justified recommendations to assist corporate financial managers in making a range of financial decisions given the current market conditions.

The assignment also provides students the opportunity to work independently, facilitate self- improvement and take responsibility for the quality of their individual work, as well as develop work-ready skills using Refinitiv Eikon database, one of the most comprehensive finance databases that is widely used by industry practitioners.

The assignment is a case study which involves a telecommunications and technology company

– Telstra Corporation Limited (ASX: TLS).

Scenarios

Today is 3rd May 2021.

You are an analyst at a renowned equity advisory firm, Aussie Finance Consulting (AFC). The executive management of AFC has assigned you a task to carry out a special project for its client Telstra Corporation Ltd (TLS), which requires preparing a business report. This report will be presented to AFC executive management and the senior management of TLS.

Telstra Corporation Limited is a telecommunications and technology company. Its principal activity is to provide telecommunications and information services for domestic and international customers. It operates through four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT(N&IT) and Telstra InfraCo. Telstra Consumer and Small Business is a provider of telecommunication products, services and solutions across mobiles, fixed and mobile broadband, telephony and Pay Television and digital content to the consumer and small business customers in Australia. Telstra Enterprise is engaged in the sales and contract management for medium to large business and government customers in Australia and globally. N&IT is engaged in the overall planning, design, engineering architecture and construction of Telstra networks, technology and information technology solutions. Telstra InfraCo is the provider of a wide range of telecommunication products and services.

Requirements

You are required to consult the management of TLS on the following aspects:

Part 1. Dividend policy                                                                                                                                   (30 marks)

On the 14th October 2020, you read the following news about the company:

“Telstra to review whether 16¢ dividend is sustainable Financial Review; Australia; 14 October 2020.

Telstra will review its dividend ratio policy to protect the payout of 16¢ a share, as it seeks to save its reputation as one of the most reliable income stocks on the Australian Securities Exchange.

Shareholder frustration brimmed over at the company’s first-ever virtual annual general meeting, where chairman John Mullen was grilled on Telstra’s plummeting share price, which over the last five years has fallen from well over $6 to under $3.

Over that time, shareholders have watched as their annual dividends almost halved, as the encroaching NBN blasted billions out of the telecom giant’s profits. Earnings projections released in August suggest that this downward trend will continue…”

Download the full article here.

On the 11th February 2021, TLS announced an interim dividend of 8 cents, fully franked.

(a)     Research market reaction to the dividend announcement

  • Evaluate the company’s share price performance on the announcement day. Necessary data can be collected from Eikon.
    • Evaluate the performance of the overall market on the same day
    • Measure the abnormal return on the announcement day. Use market-adjusted return (which is the difference between stock return and market return) as the measure of abnormal return.
    • Construct a measure of cumulative abnormal return for the period [0,1] which includes the announcement day and the day after.

(b)    Evaluate your findings

  • How did the market react to the announcement? Is it a positive or negative reaction?
    • Why did the market react that way? Is the reaction consistent with the signalling, clientele effect, and/or agency cost hypotheses?

(c)     Recommend, with reasons, how much Telstra should pay for its final dividend of the 2021 financial year

Part 2. Seasoned Equity Offering                                                                                                                                   (20 marks)

The company would like to raise money for future investment and is considering a rights issue. Every existing shareholder will be sent one right per share of stock that he or she owns.

The management has worked out two alternative plans. In the first plan, the company will require five rights to purchase one share at a price of $3.490 per share. In the second plan, each right gives the holder the right to purchase one share at $0.698 per share. Note that the company’s current share price (on the 3rd May 2021) is $3.490.

Evaluate the two plans and recommend which plan the company should choose.

  • How much money will each plan raise? (Assume the rights issue is successful)
    • What will the share price be after the rights issue? (Assume perfect capital markets)
    • Which plan is more likely to raise the full amount of capital?

Part 3. Equity Valuation and Mergers and Acquisition.                                                                                                                                   (45 marks)

The company’s senior management is considering an acquisition. TPG Telecom Ltd (TPG) has been identified as a target.

(a)     Examine the acquisition and its potential sources of synergy

  • Provide an overview of the target company’s history and business operations
    • What is the current share price of the target firm? How is the share price performance in the last two years?
    • Identify the type of the acquisition with reasons
    • Identify the potential sources of synergy from this acquisition

(b)    Estimate the intrinsic value of the target company’s stock using the discounted free cash flow model

  • Collect financial data from Eikon to compute the four-year average of the following ratios: (i) EBIT/Sales, (ii) Property, Plant, and Equipment/Sales, (iii) Depreciation/Property, Plant, and Equipment, (iv) Net Working Capital/Sales. Note that Net Working Capital = Current Assets – Current Liabilities.
    • Forecast future sales. Assume that next year’s sale is $5,520m, the expected annual growth rate for the future years 1-5 is 5.0%, and the long-term growth rate after year 5 is 2.5%.
    • Use the average ratios computed in the first step to forecast future EBIT, property, plant, and equipment, depreciation, and net working capital.
    • Estimate the free cash flows for the next five years and the terminal value. Assume that the applicable corporate tax rate is 30% and the company’s WACC is 9%.
    • Estimate the company’s enterprise value and the value of its stock.

(c)     Perform relative valuation to ascertain the valuation of the target company’s stock.

  • Compare valuation multiples of the firm with the industry average.
    • Is the company undervalued or overvalued according to these multiples?
    • Discuss the potential challenges of using multiples to value a company

(d)    Evaluate methods of M&A payments and recommend the price range

  • Assuming that the projected synergies are $4.58 billion, and Telstra uses cash to pay for the acquisition, what is the maximum price for each share of the target firm and still generate a positive NPV?
    • What is the maximum exchange ratio TLS could offer in a stock swap and still generate a positive NPV?

Part 4. Business Report Overall Quality                                                                (5 marks)

Students are expected to present this assignment as a business report to both AFC and TLS executive management. The report must be of a standard commonly expected in the commercial world in relation to grammatical correctness, fluency, and style. This report needs:

  • Page numbering
  • Informative heading and sub-headings
  • Numbered sections
  • Executive summary
  • Table of contents
  • Reference list

The reference style to be used is Harvard style referencing. RMIT guide to referencing can be found

Your main report will a maximum of 2,000 words excluding appendix and will be professionally presented. A concise, relevant, and visually appealing report is essential for business communication.

Regarding the calculations, whilst you need to present your final work in tables in the main body of your report, all subsidiary calculations need to be provided in an appendix. You need to provide detailed steps (e.g. formulae) that lead to the final answers. Correct final answers alone will not earn full marks. Also, annotate your appendix so that the examiners can understand your work.

Please round off your values to 4 decimal places for interest rates and two decimal places for amounts, e.g. 0.0659 or 6.59%, and $10,369.78.

All assessment of numerical work is marked consequentially. So, you will be awarded marks for all correct calculations and procedures.

Order Now

Get expert help for Corporate Financial Management and many more. 24X7 help, plag free solution. Order online now!

Universal Assignment (April 11, 2026) BAFI 3257 – Corporate Financial Management. Retrieved from https://universalassignment.com/bafi-3257-corporate-financial-management/.
"BAFI 3257 – Corporate Financial Management." Universal Assignment - April 11, 2026, https://universalassignment.com/bafi-3257-corporate-financial-management/
Universal Assignment June 5, 2023 BAFI 3257 – Corporate Financial Management., viewed April 11, 2026,<https://universalassignment.com/bafi-3257-corporate-financial-management/>
Universal Assignment - BAFI 3257 – Corporate Financial Management. [Internet]. [Accessed April 11, 2026]. Available from: https://universalassignment.com/bafi-3257-corporate-financial-management/
"BAFI 3257 – Corporate Financial Management." Universal Assignment - Accessed April 11, 2026. https://universalassignment.com/bafi-3257-corporate-financial-management/
"BAFI 3257 – Corporate Financial Management." Universal Assignment [Online]. Available: https://universalassignment.com/bafi-3257-corporate-financial-management/. [Accessed: April 11, 2026]

Please note along with our service, we will provide you with the following deliverables:

Please do not hesitate to put forward any queries regarding the service provision.

We look forward to having you on board with us.

Categories

Get 90%* Discount on Assignment Help

Most Frequent Questions & Answers

Universal Assignment Services is the best place to get help in your all kind of assignment help. We have 172+ experts available, who can help you to get HD+ grades. We also provide Free Plag report, Free Revisions,Best Price in the industry guaranteed.

We provide all kinds of assignmednt help, Report writing, Essay Writing, Dissertations, Thesis writing, Research Proposal, Research Report, Home work help, Question Answers help, Case studies, mathematical and Statistical tasks, Website development, Android application, Resume/CV writing, SOP(Statement of Purpose) Writing, Blog/Article, Poster making and so on.

We are available round the clock, 24X7, 365 days. You can appach us to our Whatsapp number +1 (613)778 8542 or email to info@universalassignment.com . We provide Free revision policy, if you need and revisions to be done on the task, we will do the same for you as soon as possible.

We provide services mainly to all major institutes and Universities in Australia, Canada, China, Malaysia, India, South Africa, New Zealand, Singapore, the United Arab Emirates, the United Kingdom, and the United States.

We provide lucrative discounts from 28% to 70% as per the wordcount, Technicality, Deadline and the number of your previous assignments done with us.

After your assignment request our team will check and update you the best suitable service for you alongwith the charges for the task. After confirmation and payment team will start the work and provide the task as per the deadline.

Yes, we will provide Plagirism free task and a free turnitin report along with the task without any extra cost.

No, if the main requirement is same, you don’t have to pay any additional amount. But it there is a additional requirement, then you have to pay the balance amount in order to get the revised solution.

The Fees are as minimum as $10 per page(1 page=250 words) and in case of a big task, we provide huge discounts.

We accept all the major Credit and Debit Cards for the payment. We do accept Paypal also.

Popular Assignments

Professional Nursing Assignment Help for Students: Achieve Academic Excellence with Expert Support

Introduction Nursing is a demanding field that combines theoretical knowledge with practical skills. Students pursuing nursing courses often face challenges in completing assignments that require accuracy, critical thinking, and real-world application. This is where nursing assignment help becomes an essential academic support system. With increasing academic pressure and clinical responsibilities,

Read More »

Economics Assignment Help: A Complete Guide for Students

Introduction Economics is a fundamental subject that helps students understand how markets, governments, and individuals make decisions regarding resources. While it is highly relevant in today’s world, many students find economics assignments challenging due to complex theories, graphs, and data analysis. This is where economics assignment help becomes extremely useful.

Read More »

Law Assignment Help: A Complete Guide for Students

Introduction Law is a complex and intellectually demanding field that requires critical thinking, analytical skills, and a deep understanding of legal principles. Students pursuing law often face challenges in completing assignments due to extensive research requirements and intricate case analysis. This is where law assignment help becomes highly beneficial. With

Read More »

Nursing Assignment Help: A Complete Guide for Students

Introduction Nursing is a highly respected and demanding field that requires a strong understanding of medical concepts, patient care, and clinical practices. Students pursuing nursing often face intense academic pressure due to complex assignments, practical responsibilities, and tight deadlines. This is where nursing assignment help becomes essential. With expert assistance,

Read More »

Finance Assignment Help: A Complete Guide for Students

Introduction Finance is a core subject in business and management studies, covering areas like investment analysis, financial management, and risk assessment. While it offers excellent career opportunities, many students find finance assignments challenging due to complex calculations and analytical concepts. This is where finance assignment help becomes essential. With expert

Read More »

Computer Science Assignment Help: A Complete Guide for Students

Introduction Computer Science is one of the most popular and dynamic fields of study, offering vast career opportunities in software development, data analysis, cybersecurity, and more. However, students often face difficulties in completing assignments due to the technical complexity and time constraints. This is where computer science assignment help becomes

Read More »

Digital Marketing Assignment Help: A Complete Guide for Students

Introduction Digital marketing has become a vital part of modern business strategies, making it a popular subject among students worldwide. From social media campaigns to search engine optimization, the field is dynamic and constantly evolving. However, completing assignments in this subject can be challenging due to its practical and analytical

Read More »

Cloud Computing Assignment Help: A Complete Guide for Students

Introduction Cloud computing has become a fundamental part of modern technology, powering everything from mobile apps to enterprise systems. As universities increasingly include this subject in their curriculum, students often find it challenging to keep up with assignments and projects. This is where cloud computing assignment help becomes essential. With

Read More »

Blockchain Assignment Help: A Complete Guide for Students

Introduction Blockchain technology has rapidly gained popularity across industries such as finance, healthcare, and supply chain management. As a result, it has become an important subject in academic programs worldwide. However, students often struggle with its technical concepts and practical applications. This is where blockchain assignment help becomes highly valuable.

Read More »

Data Science Assignment Help: A Complete Guide for Students

Introduction Data Science has become one of the most in-demand fields in today’s digital era, combining statistics, programming, and analytical thinking. However, many students find it difficult to keep up with the complexity of assignments and projects in this subject. This is where data science assignment help plays a crucial

Read More »

Artificial Intelligence Assignment Help: A Complete Guide for Students

Introduction Artificial Intelligence (AI) is transforming industries across the globe, making it one of the most sought-after academic subjects today. However, mastering AI concepts and completing assignments can be challenging for many students. This is where artificial intelligence assignment help becomes essential. With expert guidance, students can better understand complex

Read More »

Assignment Writing Services: A Complete Guide for Students

Introduction Assignments are a crucial part of academic life, helping students develop knowledge, research skills, and critical thinking. However, managing multiple assignments along with exams and personal responsibilities can be overwhelming. This is where assignment writing services become highly beneficial. These services provide expert assistance, helping students complete their assignments

Read More »

Blockchain Assignment Help: A Complete Guide for Students

Introduction Blockchain technology has emerged as one of the most revolutionary innovations in recent years. From cryptocurrencies to secure data management, blockchain is transforming industries like finance, healthcare, and supply chain. Students studying blockchain often face challenges due to its technical concepts and real-world applications. This is where blockchain assignment

Read More »

Assignment Writing Services: A Complete Guide for Students

Introduction Assignments are a crucial part of academic life, helping students develop knowledge, research skills, and critical thinking. However, managing multiple assignments along with exams and personal responsibilities can be overwhelming. This is where assignment writing services become highly beneficial. These services provide expert assistance, helping students complete their assignments

Read More »

Academic Writing Services: A Complete Guide for Students

Introduction Academic writing is a fundamental part of education, requiring students to produce essays, research papers, case studies, and dissertations. It demands strong writing skills, proper structure, and in-depth research. However, many students struggle with academic writing due to time constraints and lack of expertise. This is where academic writing

Read More »

Online Homework Help Services: A Complete Guide for Students

Introduction Homework is an essential part of a student’s learning process, helping reinforce classroom knowledge and improve understanding. However, with increasing academic pressure and multiple responsibilities, students often struggle to complete their homework on time. This is where online homework help services become highly beneficial. They provide expert guidance, save

Read More »

Thesis Writing Help: A Complete Guide for Students

Introduction A thesis is one of the most important academic documents a student will write during their educational journey. It requires in-depth research, critical analysis, and a clear presentation of ideas. However, many students find thesis writing overwhelming due to its complexity and time-consuming nature. This is where thesis writing

Read More »

Essay Writing Help: A Complete Guide for Students

Introduction Essay writing is a fundamental part of academic life, helping students express their ideas, analyze topics, and develop critical thinking skills. Whether it’s argumentative, descriptive, or analytical, writing a high-quality essay requires proper structure, research, and clarity. However, many students struggle with essay writing due to time constraints and

Read More »

Content Writing Assignment Help: A Complete Guide for Students

Introduction Content writing has become a crucial skill in the digital era, playing a key role in blogging, marketing, and online communication. From academic essays to website content, strong writing skills are essential for students across all fields. However, many students struggle with structuring content, maintaining clarity, and optimizing for

Read More »

Digital Marketing Assignment Help: A Complete Guide for Students

Introduction Digital marketing has become one of the most important skills in today’s online-driven world. From social media marketing to search engine optimization (SEO), businesses rely heavily on digital strategies to reach their audience. Students studying digital marketing often face challenges in understanding strategies, tools, and real-world applications. This is

Read More »

UI/UX Design Assignment Help: A Complete Guide for Students

Introduction UI/UX design is a crucial aspect of modern digital products, focusing on creating visually appealing and user-friendly interfaces. From websites to mobile apps, good design enhances user experience and engagement. Students studying UI/UX design often face challenges in creativity, tools, and usability principles. This is where UI/UX design assignment

Read More »

Can't Find Your Assignment?