Investment Decision: Accounting and Finance Project Report

Running Head: Accounting and Finance
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Project report: Accounting and Finance

Accounting and Finance
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Contents
Introduction.......................................................................................................................3
Company and industry overview:.....................................................................................3
Daily return of stock price and market index:..................................................................4
Total risk, systematic risk and unsystematic risk:............................................................4
WACC and reasons of difference in cost of capital:........................................................4
Dividend policy comparison:............................................................................................6
Investment decision and Conclusion:...............................................................................8
References:.......................................................................................................................9

Accounting and Finance
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Introduction:
The report focuses on the investment in the particular company. Investment decision
is one of the crucial process in which various factors are required to be evaluate by the
professionals and the investors to make a better choice of investment. Investment decision
relates to the choice which is made by the investors along with respect of the funds that is to
be invested in the investment opportunities (Brigham & Houston, 2012). There are various
methods on the basis of which investment decision is made such as working capital, optimal
level, returns, risk, trend in the industry etc.
In the report, two companies of the retailing industry, JB HI FI and Myer limited has
been taken in the concern to conduct the report. The daily stock return, monthly stock return,
yearly stock return, market index return, systematic risk, unsystematic risk etc of both the
companies have been measured to reach over a conclusion that which company is better
option for the purpose of invest $ 10 million.
Company and industry overview:
JB HI FI is an Australian company which is operating the activities and the operations
in retailing industry. It retails the consumer goods, video games etc in through its offline and
online stores. Company has been founded in 1974 and from last 48 years, it is working
efficiently in the industry (JB HI FI, 2018). The current market and financial position of the
company is quite better. It is one of the highest goring companies in the Australian retail
industry.
Myer is an upmarket Australian company which is operating the activities and the
operations in retailing industry. It retails the women wear, intimate apparel, beauty, car audio,
handbags, accessories etc. Company has been founded in 1990 and from last 28 years, it is
working efficiently in the industry (Myer limited, 2018). The current market and financial
position of the company is quite better and explains about great future trend of the company.
Australian retail industry has been focused further and it has been found that the retail
industry is growing rapidly and due to that, firms are also reaching on great levels. The
current growth rate of retail industry is 4.32%.