Banking and Finance: Share Prices, Royal Commission Impact, Capital Budgeting

Running head: BANKING AND FINANCE
Banking and Finance
Student Name
University Name

2BANKING AND FINANCE
Table of Contents
Part A:-.............................................................................................................................................3
Current Share price..........................................................................................................................3
Part A 2: Role of Royal commission and its impact on AMP and CBA.........................................4
Part B: Capital Budgeting................................................................................................................6
1.Difference between NPV and IRR...............................................................................................6
2. Determination of Net Present Value of both the projects............................................................6
3. Determination of IRR of both the projects..................................................................................7
4. Changes in required rate of return...............................................................................................8
5 Difference in recommendations in case of NPV and IRR............................................................9
References......................................................................................................................................10

3BANKING AND FINANCE
Part A:-
Current Share price
The current share prices of AMP and Commonwealth Bank of Australia (CBA) are 3.22 and
71.94 as of 22nd September, 2018 (Asx.com.au. 2018).
The trend analysis of share price of AMP over 5 years can be evaluated with the help of the
following graph:-
2014 2015 2016 2017 2018
0
1
2
3
4
5
6
4.33
5.57 5.42
5.04
3.21
Share prices of AMP
Graph 1: Share prices of AMP over the period of last 5 years
(Source: Asx.com.au. 2018)
From the above graph, it can be inferred that the share prices have declined over the last few
years. The highest was in the year 2015 and the current share price can be considered as the
lowest in comparison to other years. This cannot be considered as a positive sign for the firm
AMP..
The trend analysis of share price of Commonwealth Bank of Australia (CBA) over 5 years can
be evaluated with the help of the following graph:-