FIN5007 Finance and Investment : Raffles Medical Group

Task:

Project Requirements (you are to answer ALL parts to this Individual Assignment) You are part of a Fund Management company, and you have been instructed by the Chief Investment Officer of your company to prepare a report for investors of Raffles Medical Group. (1) Charlotte would like to invest in Raffles Medical Group (RMG). The stock’s closing prices over the years were as follows:
a. Determine the annual stock return and average return for the last 10 years.
b. What is the stock risk over the same period?
c. Earlier studies showed that the market returns were 9.87% per annum, with a standard deviation of 13.13%. If the correlation coefficient between RMG and the market is 1.13, calculate (with explanation) the beta of 
i. the market
ii. RMG
d. What is the potential range of returns for RMG?
e. Assuming the risk-free rate of return is 2.35%, what is the expected returns for RMG?
Year As at 31
August ($)
2011 0.7300
2012 0.7900
2013 0.9933
2014 1.3267
2015 1.4567
2016 1.5350
2017 1.1000
2018 1.0700
2019 0.9800
2020 0.8200
2021 1.4100
(2) Answer the following questions by using the Dividend Discount Model.a. In 2021, RMG paid a dividend of $0.025 per share. If the company expects to grow at a rate of 6% for the next 4 years, 4.5% for the next 3 years and thereafter 3.15% for the long run, how much should an investor expect to pay for the stock?
b. If the current stock price of RMG is $1.40, would you recommend your investors acquire the company’s shares?
(3) In a recent BBC article about a Chinese real estate developer, Evergrande, (https://www.bbc.com/news/business-58579833)
a. What are the three impacts of Evergrande’s collapse?
b. What two reasons are given for the adverse impact of a credit crunch?
(4) Referencing the following article at 
https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/audit/sea-auditdeloitte-singapore-ipo-brochure-2014-noexp.pdf
a. While there may be many benefits to listing, what challenges would a company face once it is listed?
b. What steps during the Evaluation and Planning Stage are important to make the listing successful?
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