unethical business practices Assignments | Essay Help Services

Aim of this assessment
This assessment consists of four questions each of which is designed to assess a
learning outcome on a real business setting.
Question one is related to alleged unethical business practices of AMP Limited.
Students are required to research and evaluate those practices from the point of view
of prevailing codes of conduct and ethical rules, corporate objectives and common
good.
Question two requires determination and critical analysis of Flight Centre’s weighted
cost of capital and financial leverage and impact of capital raisings on their capital
structure, risk profile and share value.
Question three is built on their prior knowledge of the company of their choice and
extends it to comprehensive evaluation of associated systematic and unsystematic
risks and examination of investment in their ordinary shares.
Question four requires students to research and critically evaluate vacuum cleaner
manufacturer Dyson’s strategic decision to enter into the automotive market in 2017
and scrapping their plans within three years to completely scrap their automobile
plans.
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QUESTION 1 (LO1)
It is alleged that thousands of AMP customers have been charged for financial advice
services they have never received. Furthermore, AMP admitted to the Financial
Services Royal Commission that it misled the corporate regulator Australian Securities
and Insurance Commission (ASIC) over AMPS’s practice of charging fees for no
service. AMP also admitted to the Royal Commission that it knowingly charged
$1,300,000 in premiums for life insurance to more than 4600 superannuation
customers who were deceased. Australian Financial Review (AFR) (17
th
April 2018)
reported that AMP had admitted to the Royal Commission that they had paid and
received commissions which were prohibited under Future of Financial Advice which
became effective on 4
th
April 2018. AFR further alleged that AMP provided incentives
for commission-based sales for their financial planners. The Royal Commission also
alleged that the Chair of AMP had interfered with a report by law firm Clayton Utz that
was commissioned by AMP after self-reporting fee for no service breaches to ASIC. It
is argued that AMP had misled ASSIC twenty times about the independence of the
Clayton Utz report into AMP’s fee for no service scandal. Royal Commission further
referred AMP to the Australian Prudential Regulatory Authority for not acting in
superannuation members’ best interest.
Required:
A. Analyse the underlying reasons behind the alleged unethical practices perpetrated
by AMP. Identify and evaluate the relevant ethical codes of conduct and ethical
principles breached. Critically analyse the role of AMP’s management in alleged
unethical and unlawful practices
B. As a public company what is AMP’s goal and how alleged unethical business
practices (some of which detailed above) aligned with the goal?
C. Should AMP have aimed to generate common good in their operations? Why or
why not? Discuss.
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QUESTION 2 (LO2)
In April 2020, Flight Centre has secured a total of $700 million through a mix of capital
raising and new debt facilities to bolster its balance sheet and liquidity position.
A. Compute debt-to-equity, financial leverage (net debt/market capitalisation of
equity, earnings per share, return on equity for years 2015-2019. Comment on
the likely causes of significant changes in calculated metrics. How does Flight
Centre compare to the industry? Comment.
B. Calculate the weighted average cost of capital (WACC) of Flight Centre for
fiscal year 2019. Why might Flight Centre want to determine their WACC?
C. Identify and analyse the key issues facing Flight Centre in seeking new capital
and evaluate the impact of capital raisings on its capital structure, risk profile
and per-share price.
D. In the light of measures obtained in a above, write a report on the stre ngths and
weaknesses of Flight Centre’s capital structure in the period 2015-2019.
QUESTION 3 (LO3)
For this question choose one of the following two companies: Funtastic Limited (ASX
Code: FUN), Sigma Healthcare Limited (ASX Code: SIG) or Treasure Wine Estate
(ASX Code; TWE).
In Assessment Two you calculated the beta coefficient for market risk.
A. Compare your result to beta you will find on finance.yahoo.com or Reuters.com.
Are they similar? Why might they be different? Discuss.
B. Within the Capital Asset Pricing Model what should cause beta for the
company of your choice (Funtastic or Sigma) to change? Would financial
leverage cause a change? Explain.
C. In Assessment Two you identified unsystematic risks for the company of your
choosing. How would you revise the unsystematic risks as of today? Suppose
you have $100,000 cash for investment. In consideration of risks and returns
involved, why or why not would you invest in Funtastic/Sigma shares?
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QUESTION 4 (LO 4)
Dyson is a prominent manufacturer of vacuum cleaners which was founded in 1978.
In 2016, I launched an ambition with a projected cost of Pounds Sterling 2 billion to
design and manufacture an electric car in the U.K and develop battery technology. Sir
James Dyson said the company had developed a fantastic electric car. In 2018, the
company decided to relocate the electric car manufacturing venture to Singapore with
the first cars to be rolled in 2021. Then in October 2019, Dyson announced that the
electric car they developed was not commercially viable and therefore they decided to
shut down their automotive division.
If you were one of the decision makers employed by Dyson describe how would you
decide to launch the project and make it a success. In your discussion, you are
expected to include all steps from the generation of idea to start operations in the UK
and subsequently in Singapore. Carry out an analysis that looks into economic,
political factors, competition, cash flow projections, costs which are included and
excluded (giving relevant examples). From capital budgeting point of view, research
and comment on what went wrong in Dyson’s strategic shift and how you would
approach differently.
The assignment must be submitted in a report format which contains table of contents,
introduction, body of the report with each question answered separately and
conclusion.