Managerial Finance: Annual Returns, Buybacks, Sustainable Finance, and Portfolio Strategies

FIN6C2 MANAGERIAL
FINANCE

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
Compute the annual returns and average annual returns for the two firms selected............................3
b) Compute the Standard deviation........................................................................................................5
c) Construct a scatter diagram.................................................................................................................6
d) Expected return on the market...........................................................................................................6
e) Obtain the betas of the two firms, and using the information already obtained calculate the
required return of the two firms.............................................................................................................7
TASK 2..........................................................................................................................................................8
What are the justifications given by the Executives for open market repurchases? Critically evaluate
them one by one.....................................................................................................................................8
Explain when buybacks become a problem? Do you agree with proposed solutions, mentioned in the
report, arising from buybacks?................................................................................................................8
Clearly explain the statement that the “Executives Are Serving Their Own Interests”. What is your take
on the above statement mentioned in the report?.................................................................................9
What is your main take away from the report?.......................................................................................9
TASK 3........................................................................................................................................................10
(a) In the article, it is mentioned that “There was nowhere to hide for investors.” Clearly discuss this
statement..............................................................................................................................................10
(b) What is the future holds for the classic 60/40 portfolio? Critically explain......................................10
TASK 4........................................................................................................................................................11
What is ‘sustainable finance’? What is the importance of ‘sustainable finance’ in finance industry?
What are the major challenges it faces?................................................................................................11
Explain the ESG investment approaches and strategies mentioned in the Report................................11
What does the Report mean by “ESG financial ecosystem?..................................................................12
What is the implication of sustainable finance on CAPM which is based on risk and return?...............13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Managerial finance is an essential part since it deals with the business's money and how they
may be utilized to positively contribute to the firm in the lengthy period so that it can reach its
aims and outcomes that were set forth in the beginning.
TASK 1
Compute the annual returns and average annual returns for the two firms selected.
Stock Prices
Year
BP
Plc Shell Plc Market
2011 42.74 73.09 5945.71
2012 41.64 68.95 5320.86
2013 48.61 71.27 6583.09
2014 34.88 60.84 6844.51
2015 31.26 45.79 6984.43
2016 37.38 54.38 6230.79
2017 42.03 66.71 7519.95
2018 37.92 58.27 7678.2
2019 37.74 58.98 7161.71
2020 20.52 35.14 6076.6
2021 26.63 43.4 7022.61
Dividends
Yea BP Plc Shell Plc