The MS in Finance Program | Assignment

Running head: FINANCE FOR BUSINESS - MASTERS
Finance for Business - Masters
Name of the Student:
Name of the University:
Author Note

1FINANCE FOR BUSINESS - MASTERS
Table of Contents
Introduction:...............................................................................................................................3
Part 1: Research on financial market.........................................................................................4
1.1 Providing information regarding the key financial product’s such as common stocks,
bonds, and preferred stocks:.......................................................................................................4
1.2 Evaluating each of the five basic principles of finance:......................................................7
Part 2: Fact Finding of Australian financial markets.................................................................9
2.1 Evaluating the Australian Bond market:..............................................................................9
2.1.1 Detecting the secondary market of bonds in Australia:....................................................9
2.1.2 Analysing the bond rating services present in Australia:................................................10
2.1.3 Analysing the key differences of Australian Government Bonds and Australian
Corporate Bonds:.....................................................................................................................10
2.1.4 Discussing about Yield to maturity and detecting its relationship with coupon rate:.....10
2.1.5 Stating about the interest rate risk and its impact on bond prices:..................................11
2.2 Fact Finding of Australian Share market:..........................................................................11
2.1.1 Analysing the listed stock in Australia and indicating how many shares are traded in the
market:......................................................................................................................................11
2.1.2 Analysing the market capitalisation and indicating how it is computed:........................11
2.1.3 Mentioning about the oldest share index of Australia and determining how it is
computed:.................................................................................................................................12
2.1.4 Depicting the 3-year historical movement of the index:.................................................12
2.1.5 Analysing the trend of the index:....................................................................................12

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Part 3: Risk analysis and project evaluation............................................................................13
3.1 Conducting sensitivity analysis on the NPV values:..........................................................13
3.2 Conducting NPV break even analysis:...............................................................................15
Conclusion:..............................................................................................................................16
References and Bibliography:..................................................................................................17

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Introduction:
The information presented in the overall assessment mainly focuses on the Australian
capital market, which is used in providing different financial products to the investors as per
their demands. Therefore, appropriate information is been shared, where highlights on
financial market, Australian financial market, and risk analysis. Therefore, the financial
market conditions have been analysed on two different perspectives, where adequate
dissections have been conducted on three financial products with appropriate news feeds. In
addition, adequate analysis is mainly conducted on the overall principles of finance, which is
evaluated on the basis of relevant news. Hence, with the analysis adequate information
regarding the financial market is evaluated, which could help in understanding the measure
that can be used by the investors.
Further analysis is mainly depicted on Australian financial markets, where the
Australian bond market is mainly evaluated to detect appropriate measures that can be used
by investors. In addition, the relevant information regarding the rating agencies of the bond
rating services is depicted, which allow the investors to understand the current valuation of
the security. Furthermore, the analysis regarding the current Australian index is evaluated for
determining the oldest index that is being operated in Australia.
The analysis is also conducted on the risk analysis of a particular project while
utilising sensitivity analysis on the NPV calculation. The overall sensitivity analysis would
mainly ensure the organisation regarding the financial feasibility of the new project and the
negative impact it might have on their overall performance in the long run. In addition, the
relevant analysis on the break-even point is used by the organisation to determine the
accurate level of performance of the project.

4FINANCE FOR BUSINESS - MASTERS
Part 1: Research on financial market
1.1 Providing information regarding the key financial product’s such as common stocks,
bonds, and preferred stocks:
Comparison Common Stock Bonds Preferred stocks
Ownership status Full None None
Nature of funding Equity Debt Debt
Risks High Low Medium
Income Dividends Coupon payments Fixed dividends
Voting right Full None None
Maturity No Yes Yes
Priority in liquidation Last First Medium
The above table indicates about relevant difference between the key financial
products provided in the Australian market. Therefore, investors could directly utilize the
investment option to support their investment decisions. Hence, the above table indicates
about the comparison between common stock, bonds, and preferred stocks. Thus, the overall
analysis of the key financial products is depicted as follows.
Common Stock:
Particulars Common Stock (Megaport Ltd)
First issuance 17-Dec-2015
Offer price 1.25
Shares offered 20.0 Million
Raised capital 25.0 Million
Trading market Australian Securities Exchange
Trading volume 344,477
Market $1.4 Billion

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capitalization
Market price 10.59
The above table provides information regarding Megaport Ltd where relevant details
regarding the IPO and the status of the organization could be identified. Therefore, common
stock is considered a risky endeavor, where the investors are provided voting rights and
receive dividends for their investment in the company. Thus, investors increase their risk
exposure by adopting common stock in their portfolio. Whoever, the share price of Megaport
Ltd increased from 1.15 initial prices to 10.59 in the current date. The above graph represents
the price action movement of the company during the past 5 year (Megaport.com 2019).
Bonds:
Particulars Bond (GSBU27)
First issuance 20 January 2016
Offer price $100
Trading market Australian Securities Exchange
Trading volume 111,960
Market capitalization $31,631 Million
Coupon rate 2.75%