AFIN310 Issues in Applied Finance- risks associated with investing in these com

Purpose of this Assignment

 

BHP Billiton, Rio Tinto and Fortescue Metals – are publicly listed companies on the ASX and also have debt issuances in the investment market via bonds or loans– you have been assigned to evaluate any risks associated with investing in these companies.

Question 1

Compare and contrast the credit ratings assigned by either Fitch, Moodys or S&P Ratings (any single agency can be used for comparison as not all 3 agencies may have assigned rating to the company). Based on your research, please describe the key reasons for difference or similarities in ratings assigned to each. Please provide some supporting information from their financial statements

Question 2

Calculate the bid/offer spread of this bond?

Question 3

Calculate the beta for BHP Billiton, Rio Tinto and Fortescue Metals (listed on ASX) in excel. • Using weekly data returns from 1 Aug 2019 to 1 Aug 2021 (based on close prices)

Provide a summary of calculations and any assumptions as to how you arrived to the final Beta figure.

Question 4

Identify any 2 risks for each company (excluding credit and liquidity risk), a global investor could face while investing in each of the banks shares and bonds over the next six to twelve months.

Question 5

As a ESG-specialist, which E, S or G factors do you think would be most relevant in assessing the ESG ratings of the Australian Materials Sector. Please identify four factors and explain why these would be important to consider from an ESG perspective for this sector.