Business Analysis of Telstra Corporation: Financial Performance and Investment Recommendation

FINANCE FOR BUSINESS ASSIGNMENT

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By student name
Professor
University
Date: 25 April 2018.
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Executive Summary
A report has been prepared on the business analysis of the company and its financial
performance has been analysed using the annual reports of the company. The various parameters
being used is the ratio analysis including the performance ratio, efffciency, turnover and market
ratios. The profit and loss account and the balance sheet of the company has also been referred
to. The report underlines the objectives of the company, the description of business and the
services and products also being offered by the company. The report also discusses on the factors
affecting the share prices of company, the beta calculation, the required rate of return for the
shareholders, the debt raising rate and finally the weighted average cost of capital. At the end,
the dividend policy of the company has also been analysed and a letter of recommendation has
also been prepared for the client in order to him/her as to why he/she should have the given stock
in the investment portfolio.
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Contents
Introduction – Description of the company.................................................................................................4
Ownership-governance structure................................................................................................................5
Fundamental Ratio (Choy, 2018)s................................................................................................................7
Price Graph/Chart movements....................................................................................................................8
Significant Announcements with respect to company – Telstra Corp.........................................................9
Calculation of Beta and rate of return of the company using CAPM.........................................................10
Calculation of Weighted average cost of capital.......................................................................................11
Debt ratio of the company........................................................................................................................12
Dividend Policy..........................................................................................................................................13
Letter of recommendation to the client....................................................................................................14
References.................................................................................................................................................15
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