CIC2001 BASIC CORPORATE FINANCE

SEMESTER 1, 2019/2020

Assignment Percentage
Group Project 20
Mid-semester test 15
Individual Assignments 10
Tutorial Presentation 5
Final examination 50
TOTAL: 100

1) Individual Assignments 1 (10%)

This assignment is designed to expose students the impact of raising debt financing on
the firm’s stock performance (i.e. it’s equity components). As such the group needs to
identify a public listed firm with key changes in the long-term debt components (any debt
changes between the years 2013 to 2018). The details required are as follows:

1. Based on the company’s 2018 annual report, tabulate the company’s long-term debt
amounts and components together with a column showing any recent
increase/decrease of debt in previous years (refer to sample given below). This
should be expressed in significant local currency denominations, e.g. RM millions.

2. Selected public listed Malaysian companies with each will be assigned individually
per student and will be posted in the spectrum.

3. Select three (3) of these key long-term debt financing components which comprise of
top three of overall debt weights and perform the following;
a. briefly describe its key unique features with reference to the company’s
annual reports and your textbook, e.g. fixed or floating financing rate,
collateral, convertibility (Hint: you may use
https://www.bixmalaysia.com/Investor-Tools/Issuer-Search)
b. briefly discuss the purpose of this form of financing with reference to the
company’s annual reports, e.g. to build a new plant, to repay an existing loan
at a cheaper rate
c. briefly discuss some comments from reputable publications on the
appropriateness or uniqueness or wisdom of using this financing method, e.g.
via The Edge, The Star, Wall Street Journal, Bloomberg

4. Conclude the impact of debt increase on the performance of the as done in (3) above.

1
General rules:

1. Plagiarism is strictly prohibited. Please run through your report via Turnitin and
show proof that the similarity rate does not exceed 25%.
2. Submit your report and the Turnitin analysis both in hardcopy (at tutorial) and
softcopy (via SPECTRUM).
3. Assessment criteria are as follows:

Item Marks
i) Correct and clear tabulation of item 1 above 3
ii) Correct and clear presentation of item 2 above 7
Total 10

A sample outline format is shown in the following page.

Company name: Sample Berhad

Stock exchange: Bursa
Malaysia
Source: www.sampleberhad.com.my/IR/annualreport

in RM millions Current year Previous Increase/(Decrease)

year

Bank borrowings type 1 1,600 1,000 600 ^

Bank borrowings type 2 400 200 200
Bonds 1,500 1,000 500 ^
Sukuk financing 300 600 (300) ^
Others 200 400 (200)
TOTAL LONG-TERM DEBT 4,000 3,200 800

NOTE:
^ These items are selected for further analyses. They sum up to RM1 billion which
substantially explains the RM0.8 billion overall increase. Further information is as
follows:

1. Bank borrowings type 1 (increase RM600 million)

The increase arises mainly from the following loan tranches:
Loan 1
• brief description – amount
• purpose
• comments from reputable sources, together with complete bibliographical details

Loan 2
• brief description – amount
• purpose
• comments from reputable sources, together with complete bibliographical details

2
2. Bonds (increase RM500 million)
• brief description – amount
• purpose
• comments from reputable sources, together with complete bibliographical details

3. Sukuk (decrease RM300 million)

• brief description – amount
• purpose
• comments from reputable sources, together with complete bibliographical details

Components of the written and printed material

The assignment should be presented with the same care and attention as any
professional business report. The report should be clean, neat, concise and without
grammatical or spelling errors.

To keep the submission of material consistent, I am imposing a standardised printing

format for your group report.

Font: Arial 11 point (Spreadsheet exhibits can be as small as 9 point)

Margins: 1 inch (2.5 cm) all around

Page Size: A4 (Spreadsheet exhibits can fold-out on ledger-size (17"x11") paper)

Spacing: Double, except Appendices and Exhibits

Number of Pages : must not exceed than 20 pages

Due Date : Week 12