FINC2011 University of Sydney Information Technology Services Paper .Follow the instruction to write 10 pages paperAll the work must be originalTurnitin re

FINC2011 University of Sydney Information Technology Services Paper .Follow the instruction to write 10 pages paperAll the work must be originalTurnitin report is required As part of the 2019 Budget, the Commonwealth Government of Australia has announced its
intention to privatise part of its information technology services. Currently these services are
run as a separate agency wholly-owned by the Commonwealth Government called
“Information Technology Australia”. However, the government would like to create a public
company out of these operations by selling 100%of its stake to the members of the public and
therefore listing the business on the Australian Securities Exchange. The Budget papers have
suggested an indicative value of around A$2 billion for the business.
You are an equity analyst employed to advise the Commonwealth Government. You have
been asked to prepare a report detailing a possible share price for the business using the
constant dividend growth model.
Required:
1. Select one (or more) proxy company (or companies) that can be used to determine a
possible beta for Information Technology Australia. Explain why this is necessary and justify
your choice/s.
2. Using data from your proxy company (companies) calculate its (their) beta(s). Using suitable
academic literature, justify your data choices with respect to time horizon, measurement
interval,
measurement of returns, and market index.
3. Determine the appropriate beta for Information Technology Australia assuming the
company has an expected market debt to equity ratio of 0.67. Clearly explain how you have
determined your beta.
4. Calculate the required return on equity for Information Technology Australia using the
Capital Asset Pricing Model (CAPM). Justify the data choices you have made in undertaking
this calculation.
5. Assuming the Information Technology Australia expects to pay a dividend of $0.50 next year
and that the dividend is expected to grow at 4% pa forever, what would be an appropriate
price for the government to sell Information Technology Australia shares? With reference to
appropriate academic literature, justify your recommendation
What’s included in the 10-page limit?
– Assignment body
– Tables
– Diagrams
What’s excluded from the 10-page limit?
– Executive summary
– Title page
– Table of contents
– Reference List
– Appendices
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< FINC 2011 Major As... Finance Discipline FINC 2011 Corporate Finance 1 Major Assignment Marking Guide [2 marks Selection and justification of proxy company's Explaining the need for proxy company/s Justifying the choice/s made 18 marks Calculation of the proxy betals Are the results reasonable? Do the number makes sense? Are dividends included on ex-dividend date? Has the sample interval/horizon been well justified? Has the choice of market index been well justified? Has suitable literature been used? 14 marks Calculation of the beta for focus company Is the beta reasonable? Has the beta been calculated correctly? Has the method used been explained and is it well justified? 13 marks Calculation of the CAPM return Is the return reasonable? Have data choices been well justified? Price recommendation 18 marks Is the price recommended reasonable? Is the decision regarding pricing supported by appropriate academic literature? 15 marks Presentation Does the report form a cohesive whole? Does the report contain an executive summary? Do the tables/graphs (if any) used contribute to the discussion? Is the report professionally represented? Penalties Inappropriate use of literature/incorrect referencing Failure to comply with formatting requirements Each page over the 10-page limit up to -5 marks up to -3 marks -3 marks Total Mark /30 marks 1 = Dashboard Calendar To Do Notifications Inbox Purchase answer to see full attachment