Fina5632 Unit 1 Assignment 2
Term Assignment FINA5632 (Investments) - Semester 2, 2013 th Due Date: Wednesday 9 October, 2013 @ 5 pm
In Class: A hardcopy of your assignment is to be submitted in class. The hardcopy version submitted in class on 9 October will be the version which is assessed for your course mark
LMS: Submit your assignment on LMS (Moodle), by attaching your files (in Word, pdf and/or Excel formats) at the ‘Assignments’ tab on LMS (Moodle)
Weight: 20% of final grade
Format: A4-pages. Font size: 12 Arial or Times New Roman, line and a half spacing, Normal margins
(about 2.5 cm top, bottom, left and right)
Required [Total Marks: 100]
You are to do two reviews of the three companies which were assigned to you for this course. The first
review …show more content…
will be a historical review of their performance from 30 June 2003 to 30 June 2013. The second review will be a to make an investment recommendation for investors who have an investment period which is at least 20 years from now (i.e. October 2033 or later)
You are to consider two types of investors for each review:
An investor who is retired and healthy with a life expectancy of at least 20 years, and needs dividend income as it is their only income (goal = financing lifestyle)
An investor who is at least 20 years away from retiring, and is investing to grow their portfolio to provide income for a distant retirement (goal = financing retirement lifestyle)
Part 1: Historical Reviews [35 Marks]
For each of your three companies, separately perform the following historical analysis (in Australian dollars):
1. On 30 June 2003 assume $100,000 was invested in the company by buying the maximum number of shares possible without exceeding $100,000. The following directions apply:
Use the closing price on 30 June 2003 as your purchase price.
No transactions costs apply
You can only purchase an exact integer number of shares (That is do not round up, round down). You will probably have some cash left over. Keep track of your un-spent cash, as you will need it later.
Note: Some students have companies which were not listed on the ASX on 30 June 2003. For these companies use the last trading day of the June after the company listed on the ASX. If, for example, a company first listed on the ASX on 18 August 2004, the next June is June 2005. The last trading day in
June 2005 is 30 June 2005.
2. You will now calculate outcomes for two types of investors:
An investor who reinvests all their dividends and franking credits in buying more shares of the same company A retiree investor who spends all their dividends and franking credits when received
3. Using the list of dividends per share (DPS), including two dates for each dividend:
a) The Dividend Ex-Date (Only include dividends which have a Dividend Ex-Date from 1 July 2003 to
28 June 2013. This is the date on which a shareholder became entitled to the cash dividend. [The cash dividend is a debt from the company to the shareholder on his date]. (Start with the first 1 July after your company listed on the ASX if this is later than June 2003.)
b) The Pay Date for each dividend. This is the date on which the cash dividend [from (a) above] is paid into the shareholder’s bank account. th c) Assume franking credits are received on the last day in August following the June 30 which is after each dividend Pay Date. [This is because franking credits are only received after lodging a tax return th after each June 30.] e.g. for a dividend paid on 1 July 2003, the next June 30 is 30 June 2004, so the franking credits would be received on 31 August 2004.
Page 1 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Reinvestment of Dividends and Franking Credits
For the investor who is reinvesting all dividends and franking credits, calculate for each company:
1. The total cash dividends received on each dividend Pay Date, and the total franking credits which apply to each dividend payment.
2. The number of shares purchased on each dividend Pay Date, using the cash dividend received that day.
3. On the last day in August of each year invest the franking credits which the investor just received for the previous financial year. [The last day in August each year is 31 August, except for 29 August 2008]. Use the monthly raw price file from Morningstar to find the price for the last day in each August. [It is the same price as the daily file, but easier to use as it has less rows, and 2003 to 2013 can be downloaded as a single file for monthly price data]
4. The total market value of investor’s shares held on 28 June 2013 (which is the last trading day in June
2013, so is the same as 30 June 2013). Use the 28 June 2013 closing market price for the shares.
5. The total market value of the investor’s shares + cash balance at 28/06/2013 + cash dividends receivable at 28/06/2013 + franking credits receivable at 28/06/2013.
(a) Cash balance at 28/06/2013 is the cash left over after the last share purchase
(b) Cash dividends receivable at 28/06/2013 only applies if the company has a dividend with a dividend ex-date on or before 28/06/2013 which has not been paid by 28/06/2013. This does not apply to most companies, but does apply to a few; such as some banks and property trusts.
(c) Franking credits receivable at 28/06/2013 applies to all franking credits attached to dividends which had a pay date between 01/07/2012 and 28/06/2013, as well as franking credits from dividends receivable at 28/06/2013 which were included in (b) above.
The total of these items is what the $100,000 invested on 30 June 2003 has grown to.
6. Calculate:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
The increase/(or decrease) in Total Investment Value from 30/06/2003 to 30/06/2013
Total return on investment from 30/06/2003 to 30/06/2013 (%)
Annual return on investment from 30/06/2003 to 30/06/2013 (% pa) [10 years]
Total Cash Dividends (1/07/ 2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Franking Credits (1/07/2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Dividends (Cash + Franking Credits) (1/07/ 2003 to 30/06/2013) (d + e)
Cash dividends in 2002/03 (per share) [Amounts which had dividend ex-dates between 1/7/2002 and
30/6/2003]. This is what an investor buying shares on 30 June 2003 might expect as cash dividends per share on their investment.
Cash dividends in 2012/13 (per share)
Total cash dividends in 2002/03 (based on the number of shares bought on 30/6/2003). This is what an investor buying shares on 30 June 2003 might expect as total cash dividends on their investment.
Total cash dividends in 2012/13
Total % change in share price. [From 30/06/2003 to 28/06/2013]
Share price change (% pa). [From 30/06/2003 to 28/06/2013] [10 years]
Total % change in cash dividends per share from 2002/03 (g) to 2012/13 (h)
Change in cash dividends per share from 2002/03 (g) to 2012/13 (h) (% pa) [10 years]
Total % change in total cash dividends from 2002/03 (i) to 2012/13 (j)
Change in total cash dividends from 2002/03 (i) to 2012/13 (j) (% pa) [10 years]
Note 1: If your company was not listed on the ASX on 30/6/2003, do all calculations which refer to
30/6/2003 from the last day of the first June of the company’s life on the ASX.
Note 2: If your company did not pay dividends in 2002/03, for 6 (g) and 6 (i) calculate the dividends for the first year after 2002/03 in which dividends were paid. For 6 (m) to 6 (p) use the year you used for (g) & (i).
For 6 (k) and (l) use the last day of June for the first full year of dividends. (e.g. for 2004/05, use
30/6/2005). For (l), (n) and (p) the pa changes will not be based on 10 years. Use correct number of years. Page 2 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Spending all Dividends and Franking Credits
For the investor who is spending all dividends and franking credits, calculate:
1.
The total cash dividends received on each dividend Pay Date, and the total franking credits which apply to each dividend payment.
2. The total market value of investor’s shares held on 28 June 2013 (which is the last trading day in June
2013, so is the same as 30 June 2013). Use the 28 June 2013 market price for the shares.
3. The total market value of the investor’s shares + cash dividends receivable at 28/06/2013 + franking credits receivable at 28/06/2013.
(a) Cash dividends receivable at 28/06/2013 only applies if the company has a dividend which has a dividend ex-date on or before 28/06/2013 which has not been paid by 28/06/2013. This does not apply to most companies, but does apply to a few such as some banks and property trusts.
(b) Franking credits receivable at 28/06/2013 applies to franking credits attached to dividends receivable at 28/06/2013 which were included in (a) above.
The total of these items is market value of the investor’s unspent investment at 30 June 2013.
4. Calculate:
a)
b)
c)
d)
e)
f)
g)
h) …show more content…
i)
j)
k)
l)
m)
Total Cash Dividends (1/07/ 2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Franking Credits (1/07/2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Dividends (Cash + Franking Credits) (1/07/ 2003 to 30/06/2013) (a + b)
Cash dividends in 2002/03 (per share) [Amounts which had dividend ex-dates between 1/7/2002 and
30/6/2003]. This is what an investor buying shares on 30 June 2003 might expect as dividends per share on their investment.
Cash dividends in 2012/13 (per share)
Total cash dividends in 2002/03 (based on the number of shares bought on 30/6/2003). This is what an investor buying shares on 30 June 2003 might expect as cash dividends on their investment.
Total cash dividends in 2012/13
Total % change in share price. [From 30/06/2003 to 28/06/2013]
Share price change (% pa). [From 30/06/2003 to 28/06/2013] [10 years]
Total % change in cash dividends per share from 2002/03 (d) to 2012/13 (e)
Change in cash dividends per share from 2002/03 (d) to 2012/13 (e) (% pa) [10 years]
Total % change in total cash dividends from 2002/03 (f) to 2012/13 (g)
Change in total cash dividends from 2002/03 (f) to 2012/13 (g) (% pa) [10 years]
Note 1: If your company was not listed on the ASX on 30/6/2003, do all calculations which refer to
30/6/2003 from the last day of the first June of the company’s life on the ASX. (The same as you did for the previous investor)
Note 2: If your company did not pay dividends in 2002/03, for 4 (d) and 4 (f) calculate the dividends for the first year after 2002/03 in which dividends were paid. For 4 (h) to 4 (m) use the year you used for (d) &
(f). For 4 (h) and (i) use the last day of June for the first full year of dividends. (e.g. for 2004/05, use
30/6/2005). For (i), (k) and (m) the pa changes will not be based on 10 years. Use correct number of years. (The same as you did for the previous investor).
Page 3 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Analysis of Historical Results
For each company write an analysis of the historical results. Include whether, in your opinion:
The company was a good investment for the purposes of each of the two types of investor, if they had made the investment in that company on 30 June 2003 (or later June date if your analysis started from a later date). What are the reasons for your conclusion?
What was good about the investment, or bad about the investment, for each investor?
Does there appear to have been a relationship between dividends and share price changes? If so what was the relationship?
Part 2: Recommendation for the Future [45 Marks]
It is September 2013. You are to write a report on each company which includes making a recommendation to each of the two investors as to whether they should invest in each of your three companies.
The following information is relevant.
Each investor has $1 million to invest.
Their goal is to finance a lifestyle which requires at least $50,000 income (dividends + franking credits) in
30/6/2013 dollars. [This is a 5% return on $1 million.]
It will all be invested in shares in companies listed on the Australian Securities Exchange (ASX).
The maximum investment in any one company is limited to $100,000.
They do not have to invest in any of your companies, but could invest in all three. So, you will be recommending investments which might total a maximum of $300,000, or zero, or anywhere in between.
This between 0% and 30% of each investor’s portfolio.
Assume that each investor has no other investment assets other than this $1 million.
You must consider their financial information which is available from the Morningstar website
Use information up to 30 August 2013, and the closing share prices on 30 August 2013. [Note: You are allowed to use any important information which comes available after 30 August 2013, such a major announcements by the company. If you use such information you must use the closing share price on the trading day after the announcement was made. Also, if a company makes a really major
announcement after 30 August and before 30 September and you don’t use it, it will cost you some marks depending on how major the announcement is. (e.g. Announcing bankruptcy and you miss it is really big)]
What to include in your report:
Why the company would be good for their portfolio, considering their goals
The risks involved in the investment
How much to invest in each company (between $0 and $100,000)
Why you make this recommendation
As most of the information about each company is the same for each investor, I suggest one report for each company with a different recommendation section for each investor.
You can have different recommendations for each investor, or the same for each investor.
Page 4 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Historical Performance of ASX 200 (30 June 2003 to 30 June 2013)
Some historical performance of the ASX 200 Index which might help as a benchmark for the performance of your companies:
$100,000 invested in the ASX 200 Index on 30 June 2003 would have produced these outcomes:
For a Retiree who spends all dividend income each year
Portfolio Value at 30 June 2013 if no reinvestment (share price movement only)
$160,145
Cash dividends in 2002/03
$ 4,177
Cash dividends in 2012/13
$ 7,277
Total Cash dividends 1/07/2003 to 30/06/2013
$ 64,124
Total Franking Credits 1/07/2003 to 30/06/2013
$ 21,973
Total Dividends (Cash + franking credits) 1/07/2003 to 30/6/2013
$ 86,097
For an Investor who reinvests all dividend income (including franking credits) each year
Portfolio Value at 30 June 2013 with reinvestment
$ 276,662
Cash dividends in 2002/03
$ 4,177
Cash dividends in 2012/13
$ 11,852
Total Cash dividends 1/07/2003 to 30/06/2013
$ 82,929
Total Franking Credits 1/07/2003 to 30/06/2013
$ 28,402
Total Dividends (Cash + franking credits) 1/07/2003 to 30/6/2013
$ 111,332
Clarity of presentation of answers - (20 marks)
How easy it is follow your assignment. This includes format of the submission.
Page 5 of 5
© John King 2013
In Class: A hardcopy of your assignment is to be submitted in class. The hardcopy version submitted in class on 9 October will be the version which is assessed for your course mark
LMS: Submit your assignment on LMS (Moodle), by attaching your files (in Word, pdf and/or Excel formats) at the ‘Assignments’ tab on LMS (Moodle)
Weight: 20% of final grade
Format: A4-pages. Font size: 12 Arial or Times New Roman, line and a half spacing, Normal margins
(about 2.5 cm top, bottom, left and right)
Required [Total Marks: 100]
You are to do two reviews of the three companies which were assigned to you for this course. The first
review …show more content…
will be a historical review of their performance from 30 June 2003 to 30 June 2013. The second review will be a to make an investment recommendation for investors who have an investment period which is at least 20 years from now (i.e. October 2033 or later)
You are to consider two types of investors for each review:
An investor who is retired and healthy with a life expectancy of at least 20 years, and needs dividend income as it is their only income (goal = financing lifestyle)
An investor who is at least 20 years away from retiring, and is investing to grow their portfolio to provide income for a distant retirement (goal = financing retirement lifestyle)
Part 1: Historical Reviews [35 Marks]
For each of your three companies, separately perform the following historical analysis (in Australian dollars):
1. On 30 June 2003 assume $100,000 was invested in the company by buying the maximum number of shares possible without exceeding $100,000. The following directions apply:
Use the closing price on 30 June 2003 as your purchase price.
No transactions costs apply
You can only purchase an exact integer number of shares (That is do not round up, round down). You will probably have some cash left over. Keep track of your un-spent cash, as you will need it later.
Note: Some students have companies which were not listed on the ASX on 30 June 2003. For these companies use the last trading day of the June after the company listed on the ASX. If, for example, a company first listed on the ASX on 18 August 2004, the next June is June 2005. The last trading day in
June 2005 is 30 June 2005.
2. You will now calculate outcomes for two types of investors:
An investor who reinvests all their dividends and franking credits in buying more shares of the same company A retiree investor who spends all their dividends and franking credits when received
3. Using the list of dividends per share (DPS), including two dates for each dividend:
a) The Dividend Ex-Date (Only include dividends which have a Dividend Ex-Date from 1 July 2003 to
28 June 2013. This is the date on which a shareholder became entitled to the cash dividend. [The cash dividend is a debt from the company to the shareholder on his date]. (Start with the first 1 July after your company listed on the ASX if this is later than June 2003.)
b) The Pay Date for each dividend. This is the date on which the cash dividend [from (a) above] is paid into the shareholder’s bank account. th c) Assume franking credits are received on the last day in August following the June 30 which is after each dividend Pay Date. [This is because franking credits are only received after lodging a tax return th after each June 30.] e.g. for a dividend paid on 1 July 2003, the next June 30 is 30 June 2004, so the franking credits would be received on 31 August 2004.
Page 1 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Reinvestment of Dividends and Franking Credits
For the investor who is reinvesting all dividends and franking credits, calculate for each company:
1. The total cash dividends received on each dividend Pay Date, and the total franking credits which apply to each dividend payment.
2. The number of shares purchased on each dividend Pay Date, using the cash dividend received that day.
3. On the last day in August of each year invest the franking credits which the investor just received for the previous financial year. [The last day in August each year is 31 August, except for 29 August 2008]. Use the monthly raw price file from Morningstar to find the price for the last day in each August. [It is the same price as the daily file, but easier to use as it has less rows, and 2003 to 2013 can be downloaded as a single file for monthly price data]
4. The total market value of investor’s shares held on 28 June 2013 (which is the last trading day in June
2013, so is the same as 30 June 2013). Use the 28 June 2013 closing market price for the shares.
5. The total market value of the investor’s shares + cash balance at 28/06/2013 + cash dividends receivable at 28/06/2013 + franking credits receivable at 28/06/2013.
(a) Cash balance at 28/06/2013 is the cash left over after the last share purchase
(b) Cash dividends receivable at 28/06/2013 only applies if the company has a dividend with a dividend ex-date on or before 28/06/2013 which has not been paid by 28/06/2013. This does not apply to most companies, but does apply to a few; such as some banks and property trusts.
(c) Franking credits receivable at 28/06/2013 applies to all franking credits attached to dividends which had a pay date between 01/07/2012 and 28/06/2013, as well as franking credits from dividends receivable at 28/06/2013 which were included in (b) above.
The total of these items is what the $100,000 invested on 30 June 2003 has grown to.
6. Calculate:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
The increase/(or decrease) in Total Investment Value from 30/06/2003 to 30/06/2013
Total return on investment from 30/06/2003 to 30/06/2013 (%)
Annual return on investment from 30/06/2003 to 30/06/2013 (% pa) [10 years]
Total Cash Dividends (1/07/ 2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Franking Credits (1/07/2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Dividends (Cash + Franking Credits) (1/07/ 2003 to 30/06/2013) (d + e)
Cash dividends in 2002/03 (per share) [Amounts which had dividend ex-dates between 1/7/2002 and
30/6/2003]. This is what an investor buying shares on 30 June 2003 might expect as cash dividends per share on their investment.
Cash dividends in 2012/13 (per share)
Total cash dividends in 2002/03 (based on the number of shares bought on 30/6/2003). This is what an investor buying shares on 30 June 2003 might expect as total cash dividends on their investment.
Total cash dividends in 2012/13
Total % change in share price. [From 30/06/2003 to 28/06/2013]
Share price change (% pa). [From 30/06/2003 to 28/06/2013] [10 years]
Total % change in cash dividends per share from 2002/03 (g) to 2012/13 (h)
Change in cash dividends per share from 2002/03 (g) to 2012/13 (h) (% pa) [10 years]
Total % change in total cash dividends from 2002/03 (i) to 2012/13 (j)
Change in total cash dividends from 2002/03 (i) to 2012/13 (j) (% pa) [10 years]
Note 1: If your company was not listed on the ASX on 30/6/2003, do all calculations which refer to
30/6/2003 from the last day of the first June of the company’s life on the ASX.
Note 2: If your company did not pay dividends in 2002/03, for 6 (g) and 6 (i) calculate the dividends for the first year after 2002/03 in which dividends were paid. For 6 (m) to 6 (p) use the year you used for (g) & (i).
For 6 (k) and (l) use the last day of June for the first full year of dividends. (e.g. for 2004/05, use
30/6/2005). For (l), (n) and (p) the pa changes will not be based on 10 years. Use correct number of years. Page 2 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Spending all Dividends and Franking Credits
For the investor who is spending all dividends and franking credits, calculate:
1.
The total cash dividends received on each dividend Pay Date, and the total franking credits which apply to each dividend payment.
2. The total market value of investor’s shares held on 28 June 2013 (which is the last trading day in June
2013, so is the same as 30 June 2013). Use the 28 June 2013 market price for the shares.
3. The total market value of the investor’s shares + cash dividends receivable at 28/06/2013 + franking credits receivable at 28/06/2013.
(a) Cash dividends receivable at 28/06/2013 only applies if the company has a dividend which has a dividend ex-date on or before 28/06/2013 which has not been paid by 28/06/2013. This does not apply to most companies, but does apply to a few such as some banks and property trusts.
(b) Franking credits receivable at 28/06/2013 applies to franking credits attached to dividends receivable at 28/06/2013 which were included in (a) above.
The total of these items is market value of the investor’s unspent investment at 30 June 2013.
4. Calculate:
a)
b)
c)
d)
e)
f)
g)
h) …show more content…
i)
j)
k)
l)
m)
Total Cash Dividends (1/07/ 2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Franking Credits (1/07/2003 to 30/06/2013) (Include amounts receivable @ 28/6/13)
Total Dividends (Cash + Franking Credits) (1/07/ 2003 to 30/06/2013) (a + b)
Cash dividends in 2002/03 (per share) [Amounts which had dividend ex-dates between 1/7/2002 and
30/6/2003]. This is what an investor buying shares on 30 June 2003 might expect as dividends per share on their investment.
Cash dividends in 2012/13 (per share)
Total cash dividends in 2002/03 (based on the number of shares bought on 30/6/2003). This is what an investor buying shares on 30 June 2003 might expect as cash dividends on their investment.
Total cash dividends in 2012/13
Total % change in share price. [From 30/06/2003 to 28/06/2013]
Share price change (% pa). [From 30/06/2003 to 28/06/2013] [10 years]
Total % change in cash dividends per share from 2002/03 (d) to 2012/13 (e)
Change in cash dividends per share from 2002/03 (d) to 2012/13 (e) (% pa) [10 years]
Total % change in total cash dividends from 2002/03 (f) to 2012/13 (g)
Change in total cash dividends from 2002/03 (f) to 2012/13 (g) (% pa) [10 years]
Note 1: If your company was not listed on the ASX on 30/6/2003, do all calculations which refer to
30/6/2003 from the last day of the first June of the company’s life on the ASX. (The same as you did for the previous investor)
Note 2: If your company did not pay dividends in 2002/03, for 4 (d) and 4 (f) calculate the dividends for the first year after 2002/03 in which dividends were paid. For 4 (h) to 4 (m) use the year you used for (d) &
(f). For 4 (h) and (i) use the last day of June for the first full year of dividends. (e.g. for 2004/05, use
30/6/2005). For (i), (k) and (m) the pa changes will not be based on 10 years. Use correct number of years. (The same as you did for the previous investor).
Page 3 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Analysis of Historical Results
For each company write an analysis of the historical results. Include whether, in your opinion:
The company was a good investment for the purposes of each of the two types of investor, if they had made the investment in that company on 30 June 2003 (or later June date if your analysis started from a later date). What are the reasons for your conclusion?
What was good about the investment, or bad about the investment, for each investor?
Does there appear to have been a relationship between dividends and share price changes? If so what was the relationship?
Part 2: Recommendation for the Future [45 Marks]
It is September 2013. You are to write a report on each company which includes making a recommendation to each of the two investors as to whether they should invest in each of your three companies.
The following information is relevant.
Each investor has $1 million to invest.
Their goal is to finance a lifestyle which requires at least $50,000 income (dividends + franking credits) in
30/6/2013 dollars. [This is a 5% return on $1 million.]
It will all be invested in shares in companies listed on the Australian Securities Exchange (ASX).
The maximum investment in any one company is limited to $100,000.
They do not have to invest in any of your companies, but could invest in all three. So, you will be recommending investments which might total a maximum of $300,000, or zero, or anywhere in between.
This between 0% and 30% of each investor’s portfolio.
Assume that each investor has no other investment assets other than this $1 million.
You must consider their financial information which is available from the Morningstar website
Use information up to 30 August 2013, and the closing share prices on 30 August 2013. [Note: You are allowed to use any important information which comes available after 30 August 2013, such a major announcements by the company. If you use such information you must use the closing share price on the trading day after the announcement was made. Also, if a company makes a really major
announcement after 30 August and before 30 September and you don’t use it, it will cost you some marks depending on how major the announcement is. (e.g. Announcing bankruptcy and you miss it is really big)]
What to include in your report:
Why the company would be good for their portfolio, considering their goals
The risks involved in the investment
How much to invest in each company (between $0 and $100,000)
Why you make this recommendation
As most of the information about each company is the same for each investor, I suggest one report for each company with a different recommendation section for each investor.
You can have different recommendations for each investor, or the same for each investor.
Page 4 of 5
© John King 2013
Term Assignment FINA5632 (Investments) - Semester 2, 2013
Historical Performance of ASX 200 (30 June 2003 to 30 June 2013)
Some historical performance of the ASX 200 Index which might help as a benchmark for the performance of your companies:
$100,000 invested in the ASX 200 Index on 30 June 2003 would have produced these outcomes:
For a Retiree who spends all dividend income each year
Portfolio Value at 30 June 2013 if no reinvestment (share price movement only)
$160,145
Cash dividends in 2002/03
$ 4,177
Cash dividends in 2012/13
$ 7,277
Total Cash dividends 1/07/2003 to 30/06/2013
$ 64,124
Total Franking Credits 1/07/2003 to 30/06/2013
$ 21,973
Total Dividends (Cash + franking credits) 1/07/2003 to 30/6/2013
$ 86,097
For an Investor who reinvests all dividend income (including franking credits) each year
Portfolio Value at 30 June 2013 with reinvestment
$ 276,662
Cash dividends in 2002/03
$ 4,177
Cash dividends in 2012/13
$ 11,852
Total Cash dividends 1/07/2003 to 30/06/2013
$ 82,929
Total Franking Credits 1/07/2003 to 30/06/2013
$ 28,402
Total Dividends (Cash + franking credits) 1/07/2003 to 30/6/2013
$ 111,332
Clarity of presentation of answers - (20 marks)
How easy it is follow your assignment. This includes format of the submission.
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© John King 2013