Project Report: Banking and Finance

Running Head: Banking and Finance
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Project Report: Banking and Finance

Banking and Finance
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Contents
Introduction.......................................................................................................................3
Part A................................................................................................................................3
AMP and CBA share evaluation...................................................................................3
Royal commission enquiries.........................................................................................5
Part B................................................................................................................................6
Required rate of return and internal rate of return........................................................6
Net present value..........................................................................................................7
Internal rate of return....................................................................................................8
Changes in required rate of return................................................................................9
NPV and IRR differences...........................................................................................11
Conclusion......................................................................................................................11
References.......................................................................................................................12

Banking and Finance
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Introduction:
Financial statement evaluation, stock price evaluation, evaluation on the new projects
of the company etc are the part of financial study of a business. It evaluates various positions
and the decision of the financial manager for the betterment of the financial performance of
the company. In the report, the focus has been done on the stock performance of CBA and
AMP. Further, the royal commission enquiries and their role in systematic risk of Australian
market have been studied. Further, a case of Henry property limited has been studied in order
to identify the importance of capital budgeting in a business.
Part A:
AMP and CBA share evaluation:
The current share price of the AMP limited is $ 3.18. Over the past 5 years, many
fluctuations have taken place in the stock price of AMP limited. The overall changes into the
stock price of the company over last 5 years are -32.70% (Reuters, 2018). The highest stock
price of the company in last 5 years were 6.83 on Feb, 2015 and the lowest stock price was
3.09 Sept, 18. It expresses that the stock price of the company is facing huge decrement in the
current month from last 5 years (Investing, 2018). The below given chart also expresses that
in the year of 2015, the stock price of the company was at peak and currently, the huge
reduction has been seen in the stock price of AMP.
The News (2018) has explained that before the 17 years, the stock price of the
company was at $ 14 and currently, it is at its lowest position. The changes have taken place
in the stock position of the company because of the huge financial hit. However, currently the
company has planned to sell its 3 segment to other company and focus on the rest 3 segments
to improve the stock position of the company. Company would be a great option for the long
term investors.

Banking and Finance
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Figure 1: AMP share price
(ASX, 2018)
The current share price of the CBA limited is $ 70.18. Over the past 5 years, many
fluctuations have taken place in the stock price of CBA limited. The overall changes into the
stock price of the company over last 5 years are -3.129%. The highest stock price of the
company in last 5 years was 96.168 on March, 2015 and the lowest stock price was 67.22
June, 18. It expresses that the stock price of the company has been changed in a great interval
(Investing, 2018). The below given chart also expresses that in the year of 2015, the stock
price of the company was at peak and currently, the reduction has been seen in the stock price
of the company.
The Reuters (2018) has explained that the changes in the company are not that much
huge. The changes have occurred into the stock price because of the some internal and
external changes in the business, such as in the year of 2015, the economical position of the
country was at its best which has helped the stock price of CBA to be improved as well.