The Role of Global Capital Markets, week (1-4) All Quiz Answers with Assignments.


 The Role of Global Capital Markets

Week 4 Assignment : 


Part A - Question 1 -

List five specific markets (capital/financial/commodity) for Unilever – as you can identify them from the 2014 Annual Report.

(150 words maximum)

The co; is required to interact with these market for ensuring an uninterrupted operation in different aspects of its operation as evident from its natural report as well; 1. equity market - the co; required to issue equity both in terms of the equity shares and the preference shares for meeting its financial requirements for supporting the strategic decisions. 2. Bond market - it allows the co; to raise additional finance to support its financial needs that could not be met with the issuance of equity tools in the equity markets. 3. Commodity market - being a large FMCG co; Unilever needs to procure its raw material for ensuring continuous operations and meeting the demand for its product across the global markets. 4. Money market - it allows the co; to gain access to the funds required for meeting the immediate obligations and liabilities of the co; The co; could issue these tools for meeting its immediate requirements of funds and repay them once the need is fulfilled. 5. FOREX market - It allows the co; to meet the difference in the needs and availability of certain foreign currency to make and payments from the operations of the co; in other countries.


Part A - Question 2 -

Briefly describe the interaction that Unilever’s operations have with each of the markets identified in question 1.

(150 words maximum)

Being one of the largest FMCG companies Unilever while carrying out its operations needs to interact with a wide range of markets as evident from its 2014 annual report. First of all it requires to interact with the stock market for issuing equity. Also the company is required to interact with a debt or bond market for gaining access to long term debt for financing its operations. Similarly the co; must engage with the money market for ensuring its high liquidity for meeting its short term liabilities and obligations and the commodity makets for procuring the raw materials and equipment required for continuous operations. Further moreit must deal with the foreign exchange market for carrying out its operations in an effective and efficient manner.


Part B - Question 3 -

Find both the UNA Euronext closing price with the ULVR LSE closing price as at 2 July 2015 and enter it here in the following format.

Closing price of UNA on 2 July 2015 was <PUT YOUR ANSWER HERE> Euro - (to two decimal places e.g. 75.84 )

Closing price of ULVR on 2 July 2015 was <PUT YOUR ANSWER HERE> Pence sterling - (just enter the whole number in Pence e.g. 1487 )

[Google Finance or Yahoo Finance are two of many possible sources for this data, for the purpose of this assessment, please use either Google or Yahoo].

Closing price of UNA on 2nd July 2015 was 37.77 Euro Closing price of ULVR on 2nd July 2015 was 2755.00 Pence Sterling


Part B - Question 4 -

Compare the UNA Euronext closing price with the ULVR LSE closing price as at 2 July 2015 from question 3.

Briefly describe two possible reasons for the difference between the UNA and ULVR price.

(100 words maximum)

The main reason for the difference between the stock price between the stock of Unilever is the differences in the FOREX rate of Euro and Pence STerling, as the currency's exchange rate is determined by the free forces of market demand and supply of these currencies. Further, the risk associated with the operations of the company also impacts the price of the stock listed across different stock exchanges.


Part B - Question 5 -

Find the most recent credit rating(s) for Unilever PLC.

(100 words maximum)

The most recent ratings of Unilever are as follows; For the long term A1 Bkd Senior unsecured - Dom Currency A1 For short term like commercial papers - P1


Part B - Question 6 -

From the recent credit rating(s) for Unilever PLC you found in question 5.

Identify two specific impacts that this (these) rating(s) may have upon Unilever’s operations.

The impacts are; 1. Easy access to finance in the debt and money markets backed by its ability to meet its financial obligations and responsibilities. But the co; is more likely to be impacted by adverse developments in the business environment and impacted more in comparison to the higher rated companies. 2. The company is able to utilize the financial resources in a more productive manner that is evident from its credit worthiness that is mainly shaped b its ability to generate sufficient revenues for meeting financial obligations.

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