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ACST6003-Corporate Valuation Report You have been appointed as an Intern for a Consulting company headquartered in Sydney CBD. As part of your role in Financial

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ACST6003-Corporate Valuation Report You have been appointed as an Intern for a Consulting company headquartered in Sydney CBD. As part of your role in Financial Valuation team, you have been assigned to examine three companies' performances: AMP limited (AMP) a financial and assessment manogement company, Harvey Norman Holdings Limited (HVN) a department store company and Suncorp Group Limited (SUN) a Financials Insurance company. Your research team has extracted raw price data and dividend data of these companies from yahoo finance website. Your role requires you to use research, analysis, application of financial models to prepare a valuation report. You have been given a set task to assist financial valuation team. Please use the following data description to complete the tasks. Excel file acst6003-assignment. xisx contains the following data: - A 15-year loan on $230,000 ('Amortisation' worksheet) - Annual yields on 30-day bank accepted bills ('price data' worksheet) - All Ordinaries Share price index ('price data' worksheet) - Share prices of AMP limited (AMP), Harvey Norman Holdings Limited (HVN) and Suncorp Group Limited (SUN) ("AMP.AX, "HVN_AX' and 'SUN AX' worksheet) - Dividends for AMP, HVN and SUN ('dividend data' worksheet) For the purposes of this report, when you look at the prices for all companies consider the data column "Adj Close price" as this considers dividend unless question states otherwise. List of Tasks Questions Q1a. Assume you take a loan of $230,000. The loan is for 15 years, and the annual interest rate offered by bank is 5.50 per cent. If the cash repayment frequency is on quarterly basis and interest payment frequency is on monthly basis, using the worksheet "Amortisation" calculate the number of repayments, effective annual rate, effective quarterly rate, and size of repayment on the loan amount. (3 marks) Q1b. Complete the loan amortisation table using worksheet "Q1" showing all works clearly. (2 marks) Q1c. Explain when it is better to pay principal and interest on a loan versus just interest to pay off the Ioan if interest remain low for the first five years as in olb but let's assume the interest rate is expected to increase for the last ten years of a 15 -year loan? Explain your reasoning ( 3 marks)

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