I am in my first year of university this year. I am studying externally in the subject of Fundamentals of Finance. We have our first assignment due at the end of May 2005.
I have had to choose two companies:
One with Ordinary Shares
WORLEYPARSONS LIMITED (WOR)
One with Rights Share
I have found the following company's with rights issues (I think), by searching through the search engine, as I couldn't find any on ASX. But then when I searched for these same companies on ASX could not see that these companies were listed as rights??? From the research I have done though so far (which has purely just been trying to find one).
Flinders Diamonds (close date 29/4/05)
Xanadu Wines (april close date)
Tele-Ip Limited (april close date)
My online tutorer advised that these April rights issues are fine and to look in the stock market listing of tomorrow's Age or Financial Review newspapers and see if you can see the expression "rts" or "rgts" or similar against my suspected rights offerings below. This will confirm that I have picked a right that you can buy on the stock market. I could only get the Financial Review, and could not find this information he is taking about. Against Flinders Diamonds I could only see pref (which I assume is preference shares). Am I looking in the wrong place or is the Age a better newspaper to find my information?
The questions of the assignment are as follows:
1. What is the minimum qty that an investor can buy of each type of security (I ASSUME I WOULD FIND THIS INFO ON THE FINANCIAL STATEMENT OF THE COMPANY CHOSEN OR CAN I FIND THIS ON ASX??) WORLEYPARSONS LIMITED (WOR) I BELIEVE HAS A CURRENT SHARE PRICE OF $6.91 AS AT 29/4/05 (INFO FOUND ON ASX)
2. Briefly define and explain 2 characteristics of each of the 2 types of securities.
3. Discuss market (systematic) risk generally and then discuss at least three company (unsystematic) risks specific for each of the 2 companies. (I ASSUME THIS WOULD BE ANY COMPANY ANNOUNCEMENTS THAT HAVE AFFECTED THE SHARE PRICE ON THE MARKET???)
4. Is there any chance that an investor might lose their entire investment in any or all of these 2 securities? In the unfortunate event of liquidation, identify the relative order of (Ordinary/Preference/Options/Convertible Notes/Rights) of the possible return of some capital to an investor. (MY ORDER WOULD BE NOTES/PREFERENCE/ORDINARY/OPTIONS/RIGHTS - IS THIS RIGHT ORDER?)
5. If you had Aust $5000 to invest in any of the above securities in 1 of the securities (ie: Ordinary/Preference/Options/Convertible Notes/Rights), which companies security would you buy if you wanted to resell in one mth? Why? Provide 8 relevant arguments. (AM I ON THE RIGHT TRACK - CONVERTIBLE NOTES DUE TO THE FOLLOWING: GUARANTEE RETURN, AS THEY ARE LIKE A LOAN TO THE COMPANY, AND THEY PAY INTEREST ON INVESTMENT AND AT END OF TERM YOU CAN CONVERT VALUE OF NOTES TO ORDINARY SHARES. AND YOU ARE LIKE A SECURED CREDITOR/INVESTOR AND YOU ARE PAID BEFORE SHAREHOLDERS IF COMPANY GOES BROKE, BUT THEN WHEN YOU DO CONVERT FROM NOTES, YOU WILL BE THAT SHAREHOLDER.)
Please help. I do not expect you to answer these questions, but if you could point me in the right direction, that would be greatly appreciated.
Thanking you in advance