Reference no: EM13499686

Part A   (600 words)                        
 
The last few years have been difficult economically but the owners of Johnsons P/L, a medium-sized manufacturer of quality dining furniture is keen to grow the business. They have seen an increase in demand for their products from overseas and feel that they will need to increase their operation in order to continue to meet this demand. They are currently looking at a number of options to finance this expansion such as through debt and through equity raising (meaning they will need to "go public"). They have determined that they need to raise $60 million. 
 
Giving consideration to  the various options, you have been requested to advise the owners of Johnsons what the various options are, outlining the positives and negatives of each. 
 
Required:  Write a report  (should be extensive)  to the owners  detailing  ALL  the different options and considerations that you feel the owners should consider raising the $60 million. 
 
Part B   (600 words)          
 
Choose a Manufacturing Company listed in the Australian Stock Market (ASX 200). Discuss the following:
 
1.  Nature of Business
2.  If there are, mention and discuss two (2) subsidiaries of the chosen company.
3.  Compare the latest Net Profit After Tax (NPAT) for two years and make some comments whether to invest or not. Explain why yes or not. 
4.  What kinds of shares are being issued?
5.  Who is the external auditor? What is the role of the external auditor?
 

Part C                            
 
Regardless of the advice you have given (Part A), the owners have decided to go "public" and issue an  'IPO"  They issue 30 million shares ($2.00), of which the payment on application is to $0.80 per share (closes 18th  April 2013), $0.50 four weeks after allocation (allocation is 12th May 2013) and the remaining amount to be paid on 30th June 2013.  The IPO attracts requests for 30.4 million shares.  In this case, it exceeds the allowable number of shares and the directors decide to apply the "first-come, first-served" approach and return the excess back to the unlucky applicants
 
Required: 
 
Journalise the events  (including dates and notations). Assume that all monies were received on 18th April (applications). Use the proper journal for your answers.