Instructions on Assessment:
This assessment is made up of an academic essay of 1500 words supported by 3 blog appendices.
Academic Essay – The Impact of the Global Covid-19 Pandemic on Corporate Finance.
(1,500 words excluding Blogs)
The following are extracts from the financial press:
‘Companies around the world – especially those receiving direct assistance from governments – are under pressure to cut payouts to shareholders and focus on keeping up payments to workers and other stakeholders.
America’s biggest banks have so far staunchly defended their plans to continue paying dividends, but in his annual letter to shareholders Mr Dimon said JP Morgan was “not immune” to the coronavirus crisis and is exposed to “billions of dollars of additional credit losses” as it lends to businesses and individuals in need.’
Some analysts argue that dividend cuts send a bad signal to shareholders making owning shares less attractive as well as hurting investors who rely on a steady income from stocks, such as pension funds’.
(FT.com ‘Dividend debate divides banking world’, April 6 2020)
Newspaper reports last month that he was in talks to sell Grubhub, his food delivery company, to Uber immediately caught the attention of Jitse Green, the chief executive of Europe’s largest food ordering app, Just Eat Takeaway (JET).
In his Amsterdam office, Mr Groen realised that if he wanted JET to be the dominant global player, he had to stop Uber getting its hands on Grubhub.
“He was very engaged”, Mr Maloney told the financial times. “Very interested to make sure that this asset did not go to Uber”. Three weeks later, Mr Groen sealed an all-stock deal valuing Grubhub at about $7.3bn.
“I haven’t seen a deal team move that fast, “Mr Maloney said of JET. “They saw the numbers that were in the press and they went right after it, because they understood the strategic nature of this acquisition for them”
(FT.com ‘Just Eat Takeaway’s Grubhub deal puts dash for growth back on menu’ June 11, 2020)
You are, in an academic essay format (70% of marks), required to answer one of the following two tasks.
Task 1: You are to critically evaluate the literature on Dividends and Dividend Policy and making reference to current examples from the financial press, assess the impact of the Covid-19 pandemic on the dividend decision of companies. Come to a conclusion as to whether or not dividend policy has a substantive impact in the creation or destruction of shareholder wealth.
Task 2: You are to come to conclusion, supported by the academic literature, as to the ability of managers to value companies in the context of the global Covid-19 pandemic and to create shareholder value by engaging in merger and acquisition activity. You should make reference to current examples of merger and acquisition activity from the financial press.
o You are expected to use strong and reputable business news sources such as the Financial Times and Bloomberg to read around and develop your understanding of the cases you use.
o You may use the companies mentioned in the above extracts as a starting point but you should widen your research to include other examples to support your arguments.
o Your answers should focus specifically on the impact of the covid-19 pandemic on companies. This theme runs through the assessment. Therefore you should use the academic literature to support your arguments but should not expect to gain information about the global pandemic from the literature.
Your answers should specifically be written in an academic essay format and not in the format of a business report. Essays specifically should not include headings, section headings, etc. Your essay should concentrate particularly ensure that there is considerable flow and cohesion between the paragraphs. It is advised that you make good use of the writing support materials on the Blackboard site. Specifically all students will benefit from reading through the following guidance on essay writing:
(30% of Marks; 10 marks per blog)
1. This essay is to be supported by three blog appendices. Students should write blogs to cover topics related to each of three out of the four syllabus areas covered in the module (creating value, core concepts of corporate finance, financial investment, financial ethics). Students will receive a maximum of 10 marks for each Blog post submitted (30 marks total). Blog posts do not have to be about the pandemic and can be on any contemporary issue. Students are encouraged to complete blogs throughout the semester although these are submitted during the assessment period.
Each of the three Blog posts should reflect on a real world contemporary issue (please ensure your blogs are current). Students should demonstrate their ability to apply theory to real world cases and reflect on what they are being taught in seminars, lectures and through the directed reading relates to the real world which they are discussing. Good Blog posts would be in-depth, considered, and displaying a mature ability to analyse, disseminate and discuss. Poor Blog posts are descriptive in nature and display only a surface appreciation of the issues. The maximum word length is 700 words per blog.
3. It is advised that students use a free Blog service like Google’s Blogger. Students are not restricted to Blogger and may use any blogging service.
4. Students may design their Blog how they wish, however it is requested that they both refrain from links to unsuitable websites and that they remember the university’s internet usage policy when posting and designing their blogs.
5. Be creative and don’t view this as a chore or requirement. Try and take time rather than rushing this. The Blog is marked on depth of reflection and consideration. Remember that deep and considered blog posts will allow you to evidence more and maximise your “critically assess” and “critically analyse”
6. Bring in contemporary issues or things happening that week in the news. Use the Blog to display what you’ve been reading about. Perhaps before blogging have a search through the Financial Times for that week or have a read of what other top business journalists are talking. Try and make your blog posts as contemporary and timely as possible to maximise marks. Don’t Blog about something what happened last year, Blog about things happening now, and things you may want to talk about in interviews with future employers
Instructions on Assessment: