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1 The University of Sydney Finance Discipline FINC 5001 Foundations in Finance Major Assignment (Weighting: 25%) Final Report Due Date: by 5pm, Monday 18th February, 2022 # Group members: 3 to 5 The impact of price-sensitive announcements on an ASX listed firm This group assignment requires you to reflect upon what you have learnt during the unit about the theory investors respond to the release of announcements by publicly listed companies. Furthermore, you will be required to undertake some empirical calculations to test that theory. For this task your group is required to select ONE (1) company listed on the Australian Securities Exchange (ASX). The company chosen by your group must have been listed on the ASX for a period of not less than six years. Once your group has chosen a suitable company you are then required to undertake the following tasks. Requirement: 1. Identify FOUR (4) public announcements made by your chosen company within the period 1st January 2020 through to 31 December 2021. The announcements should be ones that would be expected to have an impact upon the company’s share price following the release of the information. Provide a brief summary of key content of each of those announcements and explain why you think each announcement should have an impact upon the company’s share price. 2. Using data from your company calculate its beta. Using suitable academic literature, justify your data choices with respect to time horizon, measurement interval, measurement of returns, and market index. 3. Using the beta value you have calculated, apply the Capital Asset Pricing Model (CAPM) to determine the daily abnormal returns for a period of FIVE 2 (5) trading days before and TEN (10) trading days after each of your chosen company announcements. 4. Analyse the response of the market to the release of these announcements with reference to the efficient market hypothesis. Do the results indicate the information contained in the announcements has been swiftly incorporated into the share price Ensure you support your conclusions with reference to appropriate academic literature. Additional Requirement: Your report MUST include a sample of the data you have used in your calculations together with a copy of the spreadsheet with the formulas rather than the values on the cells. These must be in the appendix of the assignment. Assessment Criteria: o Conforming with instructions (e.g. word length, font, other instructions) o Presentation, communication & style (written) o Clarity of expression (incl. accuracy, spelling, grammar, punctuation) o Referencing o Use of literature/ Knowledge of theory o Data/information gathering/processing o Conclusions o Analysis o Problem solving o Originality Your assignment is heavily weighted towards research into relevant academic literature. Ensure that you refer to the source documents to justify selection of variables and in your discussion of the corporate announcements. Formatting and Presentation: 1. The assignment should be no more than 10 pages, with 1.5 line spacing and size 12 Times New Roman Font. You may use smaller font for the presentation of your Excel spreadsheets. Marks will be reduced by 10% for each page that the assignment exceeds 10 pages. Hence your mark will be reduced to zero if the assignment exceeds 20 pages. Brevity and conciseness are key ingredients of a highly successful report. You will be penalised for inappropriate formatting. 2. Make sure you use proper referencing in your assignment. The referencing style you choose to use must be consistent throughout your report. You will be penalised if references are used inconsistently throughout the report. 3 3. Pay particular attention to presentation. A component of your mark will be based on presentation. Avoid overdoing formatting, and ensure that the assignment is very clear, logical and professional. Pay attention to grammar. Clear and logical presentation is a major challenge in assignment preparation. Preparing a concise assignment is another major challenge. Every part of the assignment should somehow add to the end result – determining an appropriate share price – otherwise it is superfluous and distracting. 4. The report must be submitted as a PDF document. You must submit the report electronically Page limit for assignment – 10 pages What’s included in the 10 page limit – Executive summary – Assignment body – Tables – Diagrams What’s excluded from the 10 page limit – Title page – Table of contents – Reference list – Appendices