Assessment Brief - Coursework

Academic Year 2024-2025

Semester II
Module Number BSM007
Module Title Corporate Financial Management
Assessment Method Coursework
Deadline (time and date) 1pm, 15/04/2025
Assessment Dropbox in the Module
Submission
Study Area in CampusMoodle.
Word Limit 3500
Use of Generative Artificial Intelligence
IS NOT authorised
(AI) text
Module Co-ordinator Dr Farooq Ahmad

What knowledge and/or skills will I develop by undertaking the assessment?

The assessment will help in developing the key skills required in financial
decision making. This assessment will test the basic understanding in the core
concepts in corporate finance. It will require the students to apply the main tools
and techniques required to make appropriate financial decisions. This
assessment will be helpful in learning on how to get the current financial data.
This assessment will also be helpful in explaining the anomalies or puzzles in
company and financial data that are not in line to the predictions of financial or
economic theory.
On successful completion of the assessment students will be able to achieve the
following Learning Outcomes:
1. To undertake a comprehensive risk profile of a company.
2. To estimate firm’s weighted average cost of capital and to evaluate its
capital structure.
3. To understand the factors behind firm’s value.
4. To critically evaluate firm’s capital investment decisions.
5. To evaluate firm’s dividend policy
Please also refer to the Module Descriptor, available from the module Moodle
study area.

Date created: August 2023

Version: 5
What is expected of me in this assessment?
1. You are expected to apply the financial theories into practice.
2. You are expected to analyse the business and financial risk of public limited
companies.
3. You are expected to estimate the intrinsic value of a public limited company.
4. You are expected to analyse the capital structure and payout policies of public
limited companies.
Task 1: Firm’s Risk Profile Analysis (40 marks in total)
This task is linked to learning outcomes 1 and 2.

You are expected to undertake a comprehensive risk profile analysis on Vodafone

Group plc. More specifically, using both accounting and market-based risk
measures, you should estimate and explain the meaning, sources and significance of
the Business and Financial risks linked to the company.

This analysis must cover the following lines of investigation:

1. Analysis of sales growth rate within the context of average growth rate of the
sector.
You are expected to calculate the sales growth rate correctly, compare this with the
average growth rate of the sector. If this value is significantly different from sector
average, discuss the likely causes of the difference. (5 marks)

2. Analysis of operating profit margin within the context of average profit margin
in the sector.
You are expected to calculate firm’s operating profit margin correctly and compare
this with sector average. If this value is significantly different from sector average,
discuss the likely causes of the difference. (5 marks)

3. Analysis of firm’s operating leverage.

You are expected to calculate firm’s operating leverage correctly and interpret this in
the light of the forecasted growth rate of sales within the sector. (5 marks)

4. Analysis of firm’s weighted average cost of capital (WACC), capital structure

and financial leverage.
You are expected to calculate firm’s WACC correctly, compare firm’s capital structure
and financial leverage with the sector average. If these values are significantly
different from sector average, discuss the likely causes of the difference. (5 marks)

5. Analysis of firm’s (systematic risk) Beta.

You are expected to present firm’s beta values over the last five years and be able to
explain/link any change in the beta to the changes in variables linked to systematic
risk. (5 marks).

6. Analysis of Return on Assets (ROA) and Return on Equity (ROE).

You are expected to calculate and discuss the drivers behind the changes in
these ratios. (5 marks)

Date created: August 2023

Version: 5
What is expected of me in this assessment?

7. In the light of above analysis, discuss the risk mitigating strategies that have
been or could have been used by the management to control the key risks.
You are expected to review the hedging strategies used by the management to
mitigate the key business and financial risks. You can also suggest any particular risk
mitigating strategy in the case of this company. (10 marks)

Task 2: Firm Value Analysis (30 marks in total)

This task is linked to learning outcome 3.
Undertake a comprehensive analysis of Vodafone Group plc’s intrinsic value.

You should use the following firm value models in your analysis.

a) The Price/Earnings (P/E) Ratio approach (5 marks)

b) Dividend Discount based Model (5 marks)
c) Cash-flows based Model (20 marks)

You are expected to understand the main drivers of firm valuation. For each of the firm
value models, students are expected to clearly identify the value drivers (input
variables) with clear discussion of the assumptions (where applied). You are expected
to run the model in excel and estimate the intrinsic value of the firm by using these
models. You are also expected to compare the estimated intrinsic value with the
current market capitalisation of the company to see the difference in these values. It is
also important to elaborate on the assumptions used in the models (and other short
comings) if the estimated value of a model is significantly different from market
capitalisations. You are also expected to recommend the best model to be used for firm
valuation in this sector.

Task 3: Capital Investments, Mergers and Acquisitions (15 marks in

total)
This task is linked to learning outcome 4.
Critically evaluate the main objectives behind the £16.5 billion merger of Vodafone’s
domestic business with CK Hutchison’s Three UK.
Students are expected to use the findings in task 1 and task 2 to highlight the drivers
behind this merger and how this merger will meet management’s objective of
shareholder’s wealth maximisation. (15 marks)

Date created: August 2023

Version: 5
What is expected of me in this assessment?
Task 4: Analysis of Firm’s Dividend Policy (15 marks in total)
This task is linked to learning outcome 5.
Critically appraise the signalling effect caused by the choice of cash dividends and
share buybacks which underpin Vodafone Group plc’s recent payout policy.
Students are expected to review firm’s dividend policy and any change in the trend.
Students should identify and briefly discuss dividend theories that may have influenced
the management’s decision of choosing a particular form of dividend policy. (15 marks)

Coursework format
This coursework should be presented in the form of a Management Report which is
divided into sections as follows: Title/Front Page (Students Name and Matriculation
Number, Course, Name of the Module, Word Count), Contents Table, Executive
Summary, Bibliography and References, Appendices. This coursework should be
approximately 3500 words and in typed format.

General Guidelines:

1) Please download the (annual) Income Statement and Balance sheet data for this
coursework from FAME database (available in RGU Library), www.reuters.com,
FT.com or Companies House database.
2) For Revenue forecast, EPS forecast, and DPS forecast, please use
www.marketscreener.com or www.ft.com. You can use any other source as well if
you do not agree with these forecasts.
3) For historical share price data, students can use FAME database or
www.investing.com
5) Each task should be concluded separately in that section (end of report
conclusion is not required, include the key findings/points in Executive summary).
6) Students can compare company performances even if all the companies (included
in the comparative analysis) are not reporting in the same currency. This is possible
as most of the ratios and growth rates are in percentage and hence currency
neutral. For example, sales growth rate is referred as annual percentage growth
rate, ROA is %, Inventory turnover is in times.
7) Only the main report will be marked (Excel files will not be marked).
8) Course work must be submitted to the Dropbox in campus moodle.

Date created: August 2023

Version: 5
How will I be graded?
A grade will be provided for each criterion on the feedback grid which is specific to the
assessment.
The overall grade for the assessment will be calculated using the algorithm below*.

At least 50% of the feedback grid to be at Grade A, at least 75% of the feedback grid to
A be at Grade B or better, and normally 100% of the feedback grid to be at Grade C or
better.
At least 50% of the feedback grid to be at Grade B or better, at least 75% of the
B feedback grid to be at Grade C or better, and normally 100% of the feedback grid to be
at Grade D or better.

At least 50% of the feedback grid to be at Grade C or better, and at least 75% of the
C
feedback grid to be at Grade D or better.

At least 50% of the feedback grid to be at Grade D or better, and at least 75% of the
D
feedback grid to be at Grade E or better.

E At least 50% of the feedback grid to be at Grade E or better.

F Failing to achieve at least 50% of the feedback grid to be at Grade E or better.

NS Non-submission.

*If the word count is above the specified word limit by more than 10% or the submission contains an
excessive use of text within tables, the grade for the submission will be reduced to the next lowest grade.

Date created: August 2023

Version: 5
Feedback grid
GRADE A B C D E F
DEFINITION / EXCELLENT COMMENDABLE/VERY GOOD SATISFACTORY BORDERLINE FAIL UNSATISFACTORY
CRITERIA Outstanding GOOD Highly Competent Competent Fail
(WEIGHTING) Performance Meritorious Performance Performance
Performance
Extensive analysis of Good analysis of qualitative and A reasonable analysis of Some analysis of qualitative Limited analysis of qualitative Very limited analysis of
qualitative and financial data financial data undertaken, with qualitative and financial data and financial data undertaken. and financial data undertaken. qualitative and financial data
TASK 1 undertaken, with detailed detailed trend and peer analysis of undertaken. Trend and peer Very little discussion of the No clear discussion of the undertaken. No discussion of
trend and peer analysis of key key variables/ratios. A good analysis of key sources of the main risk sources of the main risk the sources of the main risk
(40 %) variables/ratios. An excellent analytical discussion of the sources variables/ratios. A brief factors. Some understanding factors. Very limited factors. No discussion of the
analytical discussion of the of the main risk factors. A good analytical discussion of the of the implications of the risk understanding of the implications of the risk factors
Grade sources of the main risk understanding of the implications of sources of the main risk factors to investor’s required implications of the risk factors to investor’s required rate of
factors. An excellent the risk factors to investor’s factors. A reasonable level of rate of return and company’s to investor’s required rate of return and company’s
: understanding of the required rate of return and understanding of the performance. A very basic return and company’s performance. No clear
implications of the risk factors company’s performance. A good implications of the risk factors understanding of which type of performance. No clear discussion of which type of
to investor’s required rate of understanding of which type of to investor’s required rate of risks should be hedged and understanding of which type of risks should be hedged and
return and company’s risks should be hedged and which return and company’s which type of risks may not be risks should be hedged and which type of risks may not be
performance. Very clear type of risks may not be worth performance. Some worth hedging. which type of risks may not be worth hedging.
understanding of which type of hedging. understanding of which type of worth hedging.
risks should be hedged and risks should be hedged and
which type of risks may not be which type of risks may not be
worth hedging. worth hedging.
Extensive analysis of the Good analysis of the variables used A reasonable analysis of the Some analysis of the variables Limited analysis of the Very limited analysis of the
variables used in modelling in modelling firm’s value. Good variables used in modelling used in modelling firm’s value.variables used in modelling variables used in modelling
TASK 2 firm’s value. An excellent analysis of the assumptions, merits firm’s value. A brief analysis of A very brief analysis of the firm’s value. Very limited firm’s value. No clear analysis
analysis of the assumptions, and constraints of different firm the assumptions, merits and assumptions, merits and analysis of the assumptions, of the assumptions, merits and
(30 %) merits and constraints of value models in the specific sector. constraints of different firm constraints of different firm merits and constraints of constraints of different firm
different firm value models in Good reflection on model’s value in value models in the specific value models in the specific different firm value models in value models in the specific
Grade the specific sector. An comparison to market sector. Some reflection on sector. Very little reflection on
the specific sector. No clear sector. No reflection on
excellent reflection on model’s capitalisation. Good demonstration model’s value in comparison to model’s value in comparison to reflection on model’s value in model’s value in comparison to
: value in comparison to market of using some valuation models for market capitalisation. Some market capitalisation. Some comparison to market market capitalisation. No
capitalisation. An excellent forecasting. demonstration of using some basic demonstration of using capitalisation. No clear demonstration of using some
demonstration of using some valuation models for some valuation models for demonstration of using some valuation models for
valuation models for forecasting. forecasting. valuation models for forecasting.
forecasting. forecasting.
An excellent analysis of the Good analysis of the objectives A reasonable analysis of the Some analysis of the Limited analysis of the No analysis of the objectives
objectives behind capital behind capital investment objectives behind capital objectives behind capital objectives behind capital behind capital investments. No
TASK 3 investment decisions. An decisions. A good analysis of the investment decisions. A investment decisions. Some investments. Limited analysis analysis of the performance of
excellent analysis of the expected performance of these reasonable analysis of the analysis of the performance of of the performance of these these investments in the light
(15 %) expected performance of these investments in the light of performance of these these investments in the light investments in the light of of shareholder wealth
investments in the light of shareholder wealth maximisation investments in the light of of shareholder wealth shareholder wealth maximisation objective.
Grade shareholder wealth objective. shareholder wealth maximisation objective. maximisation objective.
maximisation objective. maximisation objective.
:

Extensive trend and peer Good trend and peer analysis of A reasonable level of trend and Some basic level of trend and Limited trend and peer Very limited trend and peer
analysis of firm’s dividend pay firm’s dividend pay out ratios. Good peer analysis of firm’s dividend peer analysis of firm’s dividend analysis of firm’s dividend pay analysis of firm’s dividend pay
TASK 4 out ratios. An excellent review review of the choice behind cash pay out ratios. A reasonable pay out ratios. A basic review out ratios. No clear review of out ratios. No review of the

Date created: August 2023

Version: 5
 GRADE A B C D E F
DEFINITION / EXCELLENT COMMENDABLE/VERY GOOD SATISFACTORY BORDERLINE FAIL UNSATISFACTORY
CRITERIA Outstanding GOOD Highly Competent Competent Fail
(WEIGHTING) Performance Meritorious Performance Performance
Performance
(15 %) of the choice behind cash dividends and/or share buybacks review of the choice behind of the choice behind cash the choice behind cash choice behind cash dividends
dividends and/or share and the intended signals in these cash dividends and/or share dividends and/or share dividends and/or share and/or share buybacks and the
Grade buybacks and the intended policy decisions. buybacks and the intended buybacks and the intended buybacks and the intended intended signals in these policy
signals in these policy signals in these policy signals in these policy signals in these policy decisions.
: decisions. decisions. decisions. decisions.

Coursework received late, without valid reason, will be regarded as a non-submission (NS) and one of your assessment opportunities
will be lost.
What else is important to my assessment?
What is the Assessment Word Limit Statement?
It is important that you adhere to the Word Limit specified above. The Assessment Word Limit Statement
can be found in Appendix 2 of the RGU Assessment Policy. It provides detail on the purpose, setting and
implementation of wordage limits; lists what is included and excluded from the word count; and the
penalty for exceeding the word count.

What’s included in the word count?

The table below lists the constituent parts which are included and excluded from the word limit of a
Coursework; more detail can be found in the full Assessment Word Limit Statement. Images will not be
allowed as a mechanism to circumvent the word count.

Excluded Included
Main Text e.g. Introduction, Literature Review,
Cover or Title Page Methodology, Results, Discussion, Analysis,
Conclusions, and Recommendations
Executive Summary (Reports) or Abstract Headings and subheadings

Contents Page In-text citations

List of Abbreviations and/or List of
Footnotes (relating to in-text footnote numbers)
Acronyms
List of Tables and/or List of Figures Quotes and quotations written within “…”

Tables – mainly numeric content Tables – mainly text content

Figures

Reference List and/or Bibliography

Appendices

Glossary

What are the penalties?

The grade for the submission will be reduced to the next lowest grade if:
 The word count of submitted work is above the specified word limit by more than 10%.
 The submission contains an excessive use of text within Tables or Footnotes.

Date created: August 2023

Version: 5
What else is important to my assessment?
What is false authorship?
“The University defines this as the practice of submitting work where the student is not the author of
that work. The ‘false authorship’ may relate to the student engaging with a third party and/or software
tool to complete an assessment, either in part or whole. This may include work produced by, but not
attributed to: another student, an essay mill, a family member or friend, a tutoring service or the
unauthorised use of Artificial Intelligence (AI) software. It may also include payment, or other favours,
though this will not always be the case. It may relate to any form of assessment or conducting research”
(RGU 2023).

What is plagiarism?
Plagiarism is “the practice of presenting the thoughts, writings or other output of another or others as
original, without acknowledgement of their source(s) at the point of their use in the student’s work. All
materials including text, data, diagrams or other illustrations used to support a piece of work, whether
from a printed publication or from electronic media, should be appropriately identified and referenced
and should not normally be copied directly unless as an acknowledged quotation. Text, opinions or ideas
translated into the words of the individual student should in all cases acknowledge the original source”
(RGU 2023).

What is collusion?
Collusion is defined as “two or more students working together, without the prior authorisation of the
Course Leader, tutor or supervisor, to produce the same piece of work, and then attempting to present
this work as their own“ (RGU 2023).

For further information please see Academic Integrity.

What if I’m unable to submit?

 The University operates a Fit to Sit Policy which means that if you undertake an assessment then
you are declaring yourself well enough to do so.
 If you require an extension, you should complete and submit a Coursework Extension Form. This
form is available on the RGU Student and Applicant Forms page.
 Further support is available from your Course Leader.

What additional support is available?

 RGU Study Skills provide advice and guidance on academic writing, study skills, maths and
statistics and basic IT.
 RGU Library guidance on referencing and citing.
 The Inclusion Centre: Disability & Dyslexia.
 Your Module Coordinator, Course Leader and designated Personal Tutor can also provide
support.

What are the University rules on assessment?

The University Regulation ‘A4: Assessment and Recommendations of Assessment Boards‘ sets out
important information about assessment and how it is conducted across the University.

Date created: August 2023

Version: 5