Vodafone Group PLC For this assignment, we need to follow the below feedback, then follow the structure to write a 2000 words report. For the previous assignment, we calculate the numbers of Vodafone Group PLC’s cash flow, as shown below. Then, What to do next Page 1 of 4 You should make a recommendation on how Vodafone Group PLC could increase shareholder value by its Corporate Finance decisions. It should be based on one of the following: • • • Corporate Governance Capital Structure Dividends or Repurchases Structure • • • • • • • You should answer the following questions in your essay: Discuss important and recent academic literature on this topic Explain why your recommendation is original DCF Baseline – this is what you have already done DCF after Recommendation – see below for suggestions Explain how your recommendation has increased has changed the values of the company DCF Bibliography Suggestions: Literature • • • • • You should demonstrate that you understand the topics considered in class There should also be evidence of understanding and appraisal of required readings Lecture notes and required readings are available for all topics from Canvas You should also include additional readings To find journal articles you can use Google Scholar and Library services for keyword searches Suggestions: Originality • • • You should include original ideas in your analysis Try to make your suggestions different from the rest of the class You will have to try to find a balance between originality and what is practical Suggestions: Discounted Cash Flow after your Recommendation • • • It is possible your recommendation may have some impact on the following: Growth – will company increase profits? Beta – will the risk of the company change? Page 2 of 4 • • • Cash – will company pay out or bring in cash to balance sheet? Debt – will debt change? Number of shares – will company issue or buy back shares? These variables should not change: • • • Last year’s Free Cash Flow to Firm Risk-Free Rate Expected Market Return Complete the new Discounted Cash Flow valuation after your recommendation, and estimate how much shareholder wealth would increase by as a result of your suggestions. Structure (MUST FOLLOW FOR THIS ASSIGNMENT) Introduction Key points: • What topic does your recommendation focus on? • Introduce general background of the topic you choose • Summary of your recommendation • Why do you think your recommendation is important? Literature review Key points: • Discuss the important and recent academic literature on the topic you choose • Link the literature to your recommendation and find academic literature support for your recommendation • The literature should include but is not limited to the reading material in your lecture notes Case study Key points: • Explain the design of your recommendation in detail, emphasizing what make it different from what other students would recommend Page 3 of 4 • Using the DCF model to explain your recommendation mathematically. You may use a table, or tables to present the financial status of Vodafone before and after your recommendation Discussion Key points: • Using the results you get in ‘Case study’ section to analyze how your recommendation has changed the value in the DCF model, and how much shareholder value has increased by. • You may also discuss the risk that the firm may face after your recommendation Conclusion Key points: • Highlight your recommendation and the results again to conclude your essay • Avoid to use the exact same words in this section as the words used to explain your recommendation and your findings in the previous sections Reference Key points: • List all the academic literature you reference in your essay • You are recommended to use reference management software to build up your bibliography Page 4 of 4 Vodafone December 2017 Yahoo finance 2 Vodafone Use Vodafone Group Plc (VOD.L) LSE - LSE Delayed Price. Currency in GBp × DO NOT USE Vodafone Group Plc (VOD) NasdaqGS - NasdaqGS Real Time Price. Currency in USD 3 Recommendation You should make a recommendation on how Vodafone could increase shareholder value by its Corporate Finance decisions It should be based on one of the following: Corporate Governance Capital Structure Dividends or Repurchases (We will cover Capital Structure 19th October and Dividends/ Repurchases 2nd November) 4 Structure Calculate Discounted Cash Flow of the company now (baseline) Choose what topic your recommendation focuses on Discuss important and recent academic literature on this topic Describe your recommendation in detail Calculate Discounted Cash Flow after your recommendation (hypothetical based on your suggestions) Discuss any implications and/or risks involved with 5 your recommendation Assessment Criteria: Template Poor Good Very Good 0-50 50-60 60-70 Excellent Outstanding 70-80 80-100 Literature Review of the Topic Originality of your Recommendation Discounted Cash Flow Methodology 6 Literature Review: Knowledge of Course Content You should demonstrate that you understand the topics considered in class There should also be evidence of understanding and appraisal of required readings Lecture notes and required readings are available for all topics from Canvas 7 Literature Review: Recent Journal Articles To find journal articles for your project you can use Google Scholar for keyword searches You can browse the recent issues of well respected journals at: Journal of Finance Journal of Financial Economics Review of Financial Studies Journal of Corporate Finance 8 Originality of Your Recommendation You should include original ideas in your analysis its CEO with a £1m cash bonus for every 0.1% very common You will have to try to find a balance between originality and what is practical 9 Discounted Cash Flow Methodology In your analysis you should employ quantitative valuation techniques to estimate the impact of your recommendations You should conduct a DCF valuation of the company as it is now Then estimate what would change if the company followed your recommendation The data and assumptions used in any calculations should be clearly explained 10 Discounted Cash Flow Methodology Estimate the impact of your recommendation on: Growth will company increase profits? Beta will the risk of the company change? Cash will company pay out or bring in cash to balance sheet? Debt will debt change? Number of shares will company issue or buyback shares? 11 Discounted Cash Flow Methodology Most other variables should not change: Risk-Free Rate Expected Market Return 12 DCF Baseline Calculation (Week 7) Deadline: Friday Week 7 05/11/21 Your DCF calculations for the company, as it is now, should be submitted using the form that will be provided in Week 6 This is just to help you make progress with your assignment There will be no marks given, but you will receive feedback on whether your initial valuation of the company is correct Then go on to think about how to change the company 13 Full Assignment (Week 10) Deadline: Friday Week 10 26/11/21 Assignment should be submitted using the form that will be provided in Week 9 Detailed instructions on submission will be given in advance of the deadline 14 Word Count No strict word limit Guideline of approximately 2,500 words Emphasis is on quality of work submitted 15 Marking Usually about the top 25% of students will receive a Distinction The next 50% will receive a Pass with Commendation The final 25% will receive a Pass (or Fail) 16
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