Calculate firm after-tax weighted average cost of capital

Reference no: EM131985568 , Length: word count:1000

Assessment Task - Report

For this assignment, you are encouraged to use the information provided on the firm's corporate websites together with the following sources:

OneSource: Global Business Browser
Australian Stock Exchange
Yahoo Finance
Reuters
News sources such as those secured through the Library's ANZ Newsstream and Factiva databases are also likely to be relevant

Your report should include:

A brief executive summary.
Introduction.
Body (use appropriate headings and sub-headings as relevant sign-posts).
Conclusion

Required: ARB Corporation Limited designs, manufactures, distributes, and sells off road motor vehicle accessories and light metal engineering works in Australia, the United States, Thailand, the Middle East, and Europe. The company operates approximately 61 ARB stores in Australia. ARB Corporation Limited was founded in 1975 and is headquartered in Kilsyth, Australia. ARB is listed on the Australian Stock Exchange and reported total revenue for the 2017 financial year of almost $385 million.

As part of the finance team of ARB Corporation you have been tasked with reviewing and preparing a report on the capital structure of the firm and critique whether the firm has been successful in maximising wealth generation for shareholders.

Your report should be 1000 words and cover the following areas:

(i) Using data from the firm's 2017 financial year annual report and other sources assume that the firm ARB has a Beta of 0.89 (Reuters) and that capital return on the market for 2017 was 8.54%:

Categorise the firm's current capital structure into debt and equity.
Calculate the firm's after-tax Weighted Average Cost of Capital.
Using the CAPM calculate whether the firm is providing an appropriate return given its risk

(ii) Compare the firm's capital structure with at least one other firm operating within a similar industry.

(iii) Critically analyse other key financial ratios for ARB.

(iv) Outline any significant changes to have occurred to the firm's capital structure during the past three years.

(v) Critically evaluate the extent to which the firm has been successful in maximising wealth for shareholders in the past three years. In doing so discuss why it is important for the firm to minimise their cost of capital.

(vi) Recommend possible ways in which the firm could adopt an alternative capital structure and lower their cost of capital.

Rationale - This assessment task covers Topics 6 through 10. This will provide an opportunity to apply the concepts in an authentic scenario that you may encounter in the workplace and also:

be able to evaluate and explain the congruence of accounting, finance and treasury functions.
be able to demonstrate appropriate communication skills in the context of corporate finance.
be able to demonstrate specific technical competencies and skills in utilising quantitative techniques in financial analysis.

Reference no: EM131985568

Questions Cloud

Create an appropriate greeting and closing for each email : Susan is unhappy with her grade in her college class. She wants to clarify what she can do to improve in the course.

Discuss the challenges of prescribed medications : Discuss the challenges of prescribed medications and OTC/Alternative complementary medicine (ACM) in relations to a patient's own culture and safety.

Number of dollars in circulation : We studied how the Reserve Bank of Australia (RBA) can influence the money supply in the Australian financial market. Answer each question briefly.

Analyze the demand for health care services : Imagine you have been asked to deliver a two-part informative workshop at a local health care expo by your Director of Community Outreach.

Calculate firm after-tax weighted average cost of capital : Using data from the firm's 2017 financial year annual report - Calculate the firm's after-tax Weighted Average Cost of Capital

What are the components for educating the patient : What are your recommendations for managing this patient's medications? What are the components for educating the patient?

Analyze potential resource conflicts : Analyze potential resource conflicts. This work is designed to evaluate your ability to assign the right resource to do the right work at the right time.

Summary of the companys financial status : Analyze the financial statements you prepared using Xero - Prepare a two-page summary of the company's financial status based on the financial statements

Describe specific experimentation and observational methods : You are the research manager within your organization, and you are grappling with a problem that needs further research.

Reviews

len1985568

5/17/2018 1:53:58 AM

Total 1000 words, Australian Client, Very High-Quality Work Needed. Comments from the Client: His there can you do this assignment by tonight as it is due at midnight with similarity less than 20% as I have already got 92% similarity on the same question by one of this type of online helper. iam in great trouble. my lecturer allow me for the second submit so I really want the quality work. This assessment is worth 15% of the total subject assessment and is marked out of 100.

len1985568

5/17/2018 1:53:53 AM

Marking criteria - Where necessary, state any assumptions you have made. Assignments should show all workings and students will be penalized for failing to do this. Correctly identify incremental capital budgeting cash flows and calculate various measures relating to capital budgeting problem using appropriate finance methodology with no errors. Identify and determine the cost of capital and be able to compute the cost of capital correctly with no flaws. Explicit and detailed analysis of all elements in business environment that cause cost of the individual source of capital to be high or low. Analysis of elements demonstrates a very broad and deep knowledge of the topic.

len1985568

5/17/2018 1:53:48 AM

Data used skilfully and demonstrates explicit integration into the analysis. The correct answers are derived using multiple relevant sources and the results are presented in a clear and professional manner. Quantitative and qualitative analysis persuasively and explicitly supports the conclusion and recommendations incorporating all factors determining cost of capital. Has developed and justified own ideas based on a wide range of sources which has been thoroughly analysed, applied and discussed. Reference list of an extensive rant of resources used. Output is logically argued, and well written in a manner that very effectively conveys the key outcomes and recommendations to the end user. All references and sources acknowledged and professionally presented.

len1985568

5/17/2018 1:53:41 AM

Requirements - As per the CSU Referencing Policy, each assessment item must indicate the style of referencing required for each task. Students should be directed to a single Guide that supports the required referencing style for each assessment task. For those tasks requiring the use of APA, students should be directed to the CSU Referencing website. This assignment must be submitted through Turnitin. It is recommended that your name and student ID are included in the first page and the pages should be numbered. Further details about submission in Turnitin are provided in online submission.

Write a Review

Required(*) Message

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

User Account

All Pages