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Corporate Finance Project

PROJECT OUTLINE

Please read this carefully simply because it is very very very important

Objective:
We will learn how to apply the theory learned in class to a Vietnamese company. You
will have the opportunity to select the company and:

1. Determine the value of a firm and assess how the following factors impact on the
value of firm
1.1 Risk profile and past investments of the firm and the sources of risk.
1.2 Capital structure and whether the firm is under or over leveraged.
1.3 Dividend policy and decide whether more or less should be paid in dividends

2. Play a role of a financial analyst – present your work to an investor

Working Arrangement

 This is a group project - RESEARCH. Each group will be required to chose a


listed company to analyse from the Vietnam Stock Market (Can be either HOSTC
or HASTC)– each group will consist of either 5 or 4 people of your choice.
(Group of 3 people will only be accepted with extreme reasons – no other sizes
will be accepted)
 Each group will need to submit their group members’ names and ID and the
company that they choose no later than WEEK 6 in lecture. No group will have
the same company, so priority will be given to the earlier.
 After Week 6, no more changes will be allowed to group members or topic
 At the end of the process, the group will be required to write one report with no
more than 2500 words and make a presentation in the last lecture of the semester
 The presumption is that each member of the group will get the same grade.
However, group members have the option of moving to a situation where group
members will potentially be awarded a different mark

Areas to be investigated analysed and reported:

1. (a) Introduction: background information relating to the firm


(b) Capital Structure
(c) Dividend Policy
(d) Firm Value
2. Presentation.

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You analysis requires quantitative, qualitative, comparative and projective analysis. You
are also required to make a 15-minute presentation of your analysis in class during the
week commencing May 211.

In the following section each of the above sections are explained in some detail. This is
not comprehensive. But, it gives you a sense of what is expected in your submission.

I. Introduction

A brief history of the company that should cover but not be restricted to the following
items:
 what the company does
 who are its major competitors
 any significant change in the nature of its operations in recent years
 a brief description of its more recent financial history
 distinctive features of its shareholders
 distinctive features of its management/Board

II. Capital Structure Choices

Your discussion in this section should include but not be restricted to the following:
 types of funding utilised by the firm
 recent trends in the level of leverage used by the firm
 the capital structure of the company relative to other similar companies
 important factors that should influence the extent to which it uses debt finance
 whether the firm's current capital structure is optimal

III. Dividend Policy

Your discussion in this section should include but not be restricted to the following:
 the current and recent history of the company with respect to paying dividends
 how the company's dividend policy compares of that of similar firms
 any characteristics of the company that are relevant to its dividend policy
 anything that the company does that is similar to paying dividends (e.g. share
repurchases-paying dividend not by cash but by issuing shares?)
 whether the company's dividend policy is optimal

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We may need more time than a lecture. Confirmation of this will be available later

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IV. Valuation

Your discussion in this section should include but not be restricted to the following:
 Use the WACC approach to arrive at an estimate of what should be the share price of
the company
 Determine how sensitive this estimate is to changes in the more important
assumptions that you have to make when deriving this estimate
 How does your estimate compare with the current share price and why might it differ
 Based on your analysis and assuming that you already have a sizeable investment in
this company, would you increase your holding, leave it unchanged or decrease it?

V. Presentation – Role Play

You will need to play role of a group of Financial Analysts. Your group is hired to give
advice to an investor on investing decision in the firm.

Try to be as Professional and Practical as possible.

Don’t violate your time limit!

Detailed time for each group Presentation will be announced later

Grade:
 The 25% of the final grade allocated for this project will be divided up as follows:

Presentation 10%
Main report 15%

 Each member of a group will be awarded the same grade unless one or more
members of the group feel this is unfair. In the event of such a disagreement, each
member of the group will be given the option of scoring the contribution of each
other member, on a scale of 1 to 5, and this information will then be used to
determine a separate score for each group member

Submission deadline: A hardcopy is required to be handed in no later than 10am -


22 May 2007

20% per day is the penalty for late submission.

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Possible sources of information:

1. Annual reports
2. Company homepages in the Internet
3. Vietcombank Company Analysing Reports
4. States Securities Commission of Vietnam
5. Securities News – Company News
6. Securities Company websites
7. Textbooks and past researches for theoretical support
8. Websites: www.ssc.gov.vn www.ssi.com.vn
www.bsc.com.vn www.vndirect.com.vn
www.vcbs.com.vn www.vir.com.vn
www.hastc.org.vn www.hsc.com.vn

Tips to be outstanding:

 Passion
 Precise
 Clear
 Creative
 Short and Simple