Financial Management

APC308

Individual assignment

Weighting – 100% of the marks for this module (please refer to the individualweightings per task).

This is an individual assignment of about 3,000 words.

The hand in date is: Monday 7th April 2014

Requirements:

The Paragon group of companies PLC is a FTSE250 company with £10 billion assetsunder management. Paragon specialises in loan origination, loan servicing and theacquisition of assets. It is the United Kingdom’s leading specialist lender.

The senior management of the Paragon group of companies has chosen to raiseadditional long-term debt in the form of a corporate bond (retail bond). The bondwill be sold by authorised offerors in multiples of £100 FACE value. A minimum initialinvestment of £2,000 is required per application. The bonds will mature in January2022, and pay a coupon rate of 6.125% in 6 monthly instalments.They will be available on the order book for retail bonds on the London stockexchange (LSE).The paragon group of companies is one of several FTSE 250 companies who havechosen to issue corporate debt. The supermarket Tesco PLC issued a retail bond in2012 to finance its launch into retail banking in the United Kingdom.

You are currently an intern at Swain, Peterson and Coopers ltd. Accountantsspecialising in providing comprehensive advice on gearing and expansion policies tocompanies. The company is experiencing an increase in the number of clientsexpressing an interest in corporate debt.

a) You have been asked to produce a report which critically examines thebenefits and risks to a company, of incorporating corporate debt into aportfolio of equity and debt. (60%)

PLEASE NOTE THIS ASSESSEMENT IS NOT INTENED TO BE A CASE STUDY OF EITHERPARAGON OR TESCO. Each student will be expected to produce a report which isapplicable to a wide audience and incorporate relevant theory, business modelsand empirical evidence thought necessary. (Reference can be made to eitherParagon or Tesco as an aid to the evaluation).

(Please see over page for b))

b) The director acting as your supervisor whilst on intern has also asked youmake an addition to the report you are preparing. You have been asked toprovide a balanced discussion of the reasons for corporate restructuringinvolving mergers. (40%)

The University policy on cheating collusion and plagiarism will be applied tothis piece of work.

Guidance:

Students might wish to consider allocating 60% of their word count to the first taskand the remaining to the second task.

Students are encouraged to be inquisitive and innovative in their approach as towhat should be included in this report the following may be of some use in providingguidance as to what could possibly be included, although this is in no way meant tobe prescriptive.

As part of your work you should explore the underlying theory behind the key areasof investigation that you identify and appropriately referenced comments andquotes to sources to demonstrate wider reading. Additionally, the inclusion of somepractical/real world examples to act as support/explanation for your evaluativecomments is encouraged. Numerical example for illustrative purposes may be of usebut should not be the only element of the work; discussion and interpretation ofmodels and concepts is also required. cr

With a word limit of about 3,000 you do not have a lot of room for long introductionsso assume you are writing to a sophisticated audience who has a working knowledgeof financial management and is well versed in business theory.

Please avoid relying too heavily on descriptive sections reproducing informationavailable from the set text. It is your own logical, evaluation of the situation, theinterpretation of course material and presentation, with critical analysis, of acoherent strategic report that will attract high marks.

Please note that the company named is a fictitious one and does notexist

ASSESSMENT CRITERIA

Criteria Fail (<34) Fail (35-39) 3rd (40-49) 2:2 (50-59) 2:1 (69-69) Ist (70+)

Knowledge of relevant conceptsand issues

Fails to identify the majority ofthe concepts relevant to thequestion or introduces topicsthat are not relevant. Theordering of the conceptsindicates a lack ofunderstanding of key concepts.

Fails to identify the majorityof the concepts relevant tothe question. Thoseconcepts that are used aremisapplied. The ordering ofthe concepts is inappropriate.

Identifies some of the keyconcepts, but not all o fthem, or displays an incorrect understanding ofsome of the conceptsdiscussed. The ordering ofthe concepts may be adhoc.

Identifies and utilises some ofthe key concepts relevant tothe question. Uses some of theconcepts, but not always in anappropriate context. The workis ordered appropriately

Identifies the majority of thekey concepts relevant to thequestion and uses them in anappropriate context. Ordersand structures them in a logicalsequence

Identifies all of the key conceptsrelevant to the question anduses them in an appropriatecontext. The material isstructured to show significantunderstanding of the key issues.

Depth of understanding andextent of critical evaluation(including evidence of widerreading)

The student has failed toaddress the question set orappears to have answered adifferent question to that set.There is no evidence of anyreading. No key issuesidentified.

There is no evaluation ofthe validity of the sourcesused or the work is basedon one key source.Inappropriate sources areused extensively. There isno evidence of appropriatewider reading. No reflectionon key issues.

There is some evaluation ofthe materials used in thework. The work is based ona limited number ofappropriate sources.Little reflection on keyissues.

Good evaluation of materialsused, with discernment obviousas to key sources. The work isbased on a number ofappropriate sources. Somereflection on key issues.

Good evaluation of allkey/important sourcesmaterials used. The work isbased on a wide range ofappropriate sources. Goodreflection on key issues.

The work is set in a contextwhere wider reading andappreciation of the context isobvious. The material includedis relevant to the topic andappropriate in addressing thekey issues identified in theassignment

Evidence of appropriate analysis The student fails to draw anyrelationships from the materialused or the student is incorrectin the relationships that theydraw.

The student draws one ortwo basic relationships fromthe material used, but thensubsequently misapplythese concepts.

The student draws one ortwo basic relationships fromthe material used, but failsto identify other importantrelationships. There may besome evidence they havenot clearly understood all ofthe material they havepresented

The student draws some limitedrelationships from the materialused. There might be minorissues where the student isincorrect in the assertions thatthey make, but overall theydemonstrate appropriateanalysis.

The student starts todemonstrate they understandthe key relationships from thematerial used. There are nosubstantive errors in theiranalysis.

All the key connections aredrawn between materials fromdifferent sources. The studentmakes no substantive errors intheir analysis and reflects uponthe key issues identified in theiranalysis.

Ability to synthesise relevantmaterial from a range ofsources

The student fails to use anyappropriate sources. There isextensive repetition of notesgiven out in class.

The student uses just a fewnon-academic sources ofinformation or the materialused is inappropriate for UGlevel study. They quoteverbatim extensively fromone or two sources. Theyuse quotations incorrectlyto support an argument.

The student uses a fewsources of information orthe material used isinappropriate for UG levelstudy. Extensive verbatimquotes are used as areplacement for thestudents own work.

The student may be limited intheir use of academic sourcessuch as journals and books, butthere is evidence that they haveattempted to access a range ofsources including non-academicones.

The student has accessed arange of academic sources suchas journals and books, and alsoappropriate non-academicones. Verbatim quotes are usedto enhance the argumentsbeing developed rather than asa replacement for the studentsown work.

The student has accessed awide range of appropriatesources. They make referenceto a wide range of material intheir work. Verbatim quotes areused from a range of sources toillustrate and support thearguments being developed,but without becoming asubstitute for the students ownwork.

Structure and clarity ofpresentation.

The work has no coherentstructure. The work is litteredwith spelling and typographicalerrors. Very poor use of English.Where appropriatetables/graphs are not used.Referencing is poor or non-existent.

The work is poorlyorganised, and structured.There are many spelling andtypographical errors. Pooruse of English. Whereappropriate tables/graphsare not used. Referencing ispatchy and incomplete.

The work is poorlystructured. There arespelling and typographicalerrors. Poor use of English.Where appropriatetables/graphs are not usedappropriately. Some of thereferencing is incomplete

The work has a clear structureand generally a logicalprogression. Occasionaltypographical and spellingerrors. Some use oftables/graphs is made whereappropriate.

The work has overall a coherentstructure and a clear and logicalprogression. Very fewtypographical and spellingerrors. Good use oftables/graphs is made whereappropriate.

The work is well structured withclearly defined objectives thatare achieved. Typographical andspelling errors are rare.Excellent use of tables/graphs ismade where appropriate.