FIN425: Corporate Finance
University of Bahrain
College of Business Administration
Economics and Finance Department
FIN425: Corporate Finance
First semester 2020-2021
Project Guidelines
Overview:
• The project will be done by a group of 3-4 students in which they are required to
select three companies and analyze their capital structure and dividend policy.
• Project weight: 20%.
• Submission Deadline: 20
th December 2020.
Guidelines:
1. Each group should choose three publicly traded companies from any country.
2. The group should obtain the financial data for the last 3 years ending 2018 or 2019
for each selected company.
3. The group needs to submit a report in which they:
Part A: Company Overview
• Give a general overview of the three companies including their type of business,
corporate social responsibility and performance using ROA and ROE. A graph of
the ROA and ROE over the 3 years should be included. Comment on this graph.
Part B: Capital Structure
• Discuss any theory that explains why firms use debt in their capital structure. Some
literature should be given.
• Analyze the capital structure of each selected company. The analysis should include
a graph of the debt-to equity ratio over the 3 years. Comment on this graph.
• Determine whether each selected company is levered or unlevered. Discuss some
of the benefits and shortcomings of leverage.
Part C: Dividend Policy
• Discuss any theory that explains why firms pay dividends. Some literature should
be given.
• Analyze the dividend policy of each selected company. The analysis should include
a graph of DPS or total dividends over the 3 years. Comment on this graph.
• Determine whether each selected company used cash dividends, stock dividends,
or stock repurchase during the last 3 years. Show an evidence for that.
Report Structure:
– Cover page.
– Introduction.
– Body.
– Conclusion.
– References.
• Students name, ID and section shall be clearly specified.
• All used resources should be referenced.
• 0.5 marks deduction per day late submission.
Report format:
– Font: New Times Roman.
– Font Size: 12.
– Spacing: Single.