The Case Analysis requires students to apply their knowledge of key finance concepts such as
financial statement analysis, risk and return, capital structure, valuation of shares and dividend
policy to an analysis of two companies in the same sector but one is listed on the Australian
Securities Exchange (ASX) and another is listed on the Singapore Securities Exchange (SGX).
Your facilitator will allocate to you two companies drawn from top 30 companies by market
capitalisation that are in the ASX100 index as of 1 December 2019 and top 30 companies by market
capitalisation that are in the Straits Times Index of the same date. (The table with the list of
companies is at the bottom).
You need to answer the following questions:
(a) Using five latest annual reports up to 31 December 2019 perform a comparative financial
statement analysis of the two allocated companies. You are expected to calculate the
Profitability and Investment ratios. (10 Marks)
(b) Using information from the latest five annual Balance Sheets, examine the capital structure
of the two companies and comment on how the capital structure has changed over the 5
years. (10 Marks)
(c) Provide a well reasoned argument why there could be differences in the capital structures of
the two companies and yet they belong to the same sector. Support this with academic
literature. (5 Marks)
(d) For the period 30 April 2019 to 31 May 2020, collect daily closing stock prices of the two
companies you allocated. Using this data and any other relevant data determine,
(i) the cost of equity of the two companies. (6 Marks)
(ii) determine the cost of capital of other sources of capital of the companies, making
reference to the lastest annual report. (4 Marks)
(e) Determine the weighted average cost of capital (WACC) of the two companies using the
latest capital structure and the costs of capital determined above. (5 Marks)
(f) Peform a valuation of the two companies’shares using the Constant Growth Dividend
Discount Valuation model. (10 Marks)

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