Corporate Financial Management
Question 1
Identity and discuss the drivers of corporate value, (those described in the course material) for Alibaba Group Holding Ltd (Hong Kong stock code: 9988). Use the market value added (MVA) approach to quantify the creation and/or destruction of value from 2^nd March 2020 to 11 September 2020. Corporate Financial Management
Note: Question 1’s word count requirement is between 1,000 and 1,200 words. Students are to provide the word count on the first page of the report. References: minimum of 5. There should be a brief introduction, the body of the answer, and a conclusion section. Students are expected to write clearly and concisely, with appropriate in-text citations and references provided (Harvard system).
Question 2
Ezsky plc produces wind turbines and is considering buying supplementary equipment that will decrease manpower needs to produce a unit from 5 manhours to 2 manhours. The main machinery has 3 more periods of useful life. If the supplementary equipment is purchased, the existing (main) machine will not be sold at a scrap value of $10,000.

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The production units are estimated depending on the state of the green industry, as follows:
Industry                                               Period 1           Period 2           Period 3
Weak (probability 70%)          2,000 units       3,000 units       2,500 units
Strong (probability 30%)         8,667 units       9,667 units       14,167 units
The employee hourly rate for the coming period is £7.00, rising in period 2 and period 3 to £8.00 and £9.00 respectively. Corporate Financial Management
The supplementary equipment has a capital cost of £300,000 with an estimated residual value at the end of period 3 of £60,000. Capital allowances are at 25% on a reducing balance basis.
The company pays corporation tax at a rate of 30% per period. The authorities will provide a one-off cash grant of $5,000 at the end of the first year.
The company assesses projects of this type using a discount rate of 5% per period.
Any difference between the written down value and proceeds from the sale may be claimed as a tax credit. Taxes are considered one period in arrears.
Required:

1. Calculate the annual cost savings for periods 1, 2, and 3.
2. Calculate the taxable profits for periods 1, 2, and 3.
3. Calculate the total cash flows for each period.
4. Calculate the expected net present value of the project suggesting whether the company should invest in the supplementary equipment.

Corporate Financial Management
 

International Finance and Securities Essay

1. Demonstrate systematic knowledge of Capital Market Securities and the function of Stock exchanges.
2. Understand the role of other financial securities including Mortgages, Loans, and Insurance products in the context of Financial Markets.
3. Able to discuss the reasons for the rise in financial securities trading and integration of the international financial markets.
4. Be able to demonstrate knowledge of Bond Market Securities, Bond ratings, and International aspects of the Bond Market.
5. Demonstrate ability to work independently and implement appropriate analytical techniques. International Finance and Securities Essay
6. Able to write a critical argument and communicate complex ideas in a clear logical manner

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Details of the tasks
1. Critically discuss capital markets and how do bond markets fit into the definition of capital markets. Discuss Bond Market securities.
2. Critically discuss the impact of reduced economic activity due to Covid 19 on the London Stock Exchange (November 01, 2019 – October 31, 2020: London Stock Exchange – FTSE all share).
Guidelines:

• Question 1: Your coursework should draw on the theories studied in the lectures and seminars and also the real-world experience of international financial markets during recent years.
• Question 1: Students may achieve higher marks with an evidence-based display of their theoretical understanding with current real-world empirical evidence.
• Question 2 is intentionally broad-based. You are encouraged to conduct research on the topic and draw your own conclusions. You are encouraged to use UEL databases and online resources including the UK Debt Management Office (DMO), Office of National Statistics (ONS), and London Stock Exchange website.
• Question 2: You are required to collect some data from online databases and make use of graphs charts and diagrams to support your discussion.

International Finance and Securities Essay