Free Custom «Corporation financial management» Essay Paper
- Home
- Free Essays
- Management
- Corporation financial management essay
Log in
Search
Sample essays
- Accounting Essays
- Admission Essays
- Analysis Essays
- Art Essays
- Biography Essays
- Biology Essays
- Book Review Essays
- Business Essays
- Case Studies Essays
- Cause and Effect Essays
- Character Analysis Essays
- Communication Essays
- Communication and Media Essays
- Comparison Essays
- Compute Technologies Essays
- Consideration Essays
- Controversial Essays
- Description Essays
- Economics Essays
- Education Essays
- Evaluation Essays
- Explanation Essays
- History Essays
- Informative Essays
- Job Essays
- Justice Essays
- Law Essays
- Management Essays
- Medicine Essays
- Music Essays
- Nursing Essays
- Personal Essays
- Personal Experience Essays
- Persuasive Essays
- Persuasive Speech Essays
- Philosophy Essays
- Political science Essays
- Politics Essays
- Proposal Essays
- Psychology Essays
- Reflective Essays
- Religion Essays
- Research Essays
- Response Essays
- School Essays
- Science Essays
- Sociology Essays
- Technology Essays
- World Literature Essays
Why choose us?
- Papers delivered punctually
- Written work that is entirely original and will pass any plagiarism test
- The highest quality papers with a 100% guarantee of satisfaction
- Ordering methods that are secure
- Customer support 24x7
- Affordably cheap prices

Clements plc is just about to pay dividend of 14p per share to its shareholders. Over the past five years, it has increased its dividend by %5 per annum, on average. The company has 1 million ordinary shares in issue with a current market price of 1.26 pounds (cum-dividend). The company also has 1 million pounds of %10 irredeemable debentures with a nominal value of 100 pounds per debenture. These have a current market value of 115.50 pounds (ex-interest) per debenture. The debenture holders have just received their annual interest payment. You should assume that the company pays corporation tax at%30. A) Calculate the weighted average cost of capital for Clements plc using market values. b) Calculate what the cost of debt would have been in (a) above, if the debentures were redeemable at par in four years time, and price quoted above was 115.5o pounds (cum-interest) because the interest was just about to be paid to the debenture holders. c) Clements plc currently operates in the food retail sector but is considering acquiring a house building company. Should the bid succeed it will fund the acquisition with an issue of an additional 1 million pounds of %7 debentures. Provide a critical assessment as to ho suitable the weighted average cost of capital you calculated in (a) above, would be to use in the assessment of this investment.
Assessment
Capital budgeting and the calculation of the WACC should be done for the business and the calculation of Cost of debt or IRR for the project to be undertaken. In a situation where Cost of debt is greater than the WACC, then it is not viable business project and it should be abandoned. It is prudent to note that, financial theory would recommend pursuing all projects that have an IRR in excess of WACC, but this should be done cautiously.In addition, increasing the debt of a company or selling more shares normally alters WACC since the expected return on debt and equity rise. In conclusion corporation financial management is pivotal in business management. In this regard, it is important that the decision making process is performed logically based on the capital budgeting analysis.
Origin of species by means of natural selection
1
Pages
6 days
Urgency
2
Sources
APA
Style
College
Level
U.S. Capitol Historical Art
1
Pages
2 days
Urgency
1
Sources
APA
Style
College
Level
The Complexity of Connection: Writings from the Stone Center’s Jean Baker Miller Training Institute
5
Pages
11 days
Urgency
1
Sources
APA
Style
College
Level
Minorities and Discrimination
4
Pages
5 days
Urgency
10
Sources
APA
Style
College
Level
The University of International Relations
1
Pages
4 days
Urgency
1
Sources
MLA
Style
High School
Level
'TDS' The Dyslexia Screener
10
Pages
11 days
Urgency
4
Sources
APA
Style
Master's
Level
Culture of an Organization
2
Pages
2 days
Urgency
Sources
APA
Style
University
Level
Recreation and Leisure
8
Pages
4 days
Urgency
10
Sources
Chicago
Style
University
Level
An Analysis of 'One Holy Night'
5
Pages
6 hours
Urgency
1
Sources
MLA
Style
College
Level
Where Have You Guys Flight
5
Pages
1 day
Urgency
Sources
MLA
Style
High school
Level
Paramedic or Doctor: heuristics and analytical reasoning in high acuity cases
5
Pages
10 days
Urgency
20
Sources
APA
Style
University
Level
Common misconceptions about work, career, and good life
3
Pages
7 days
Urgency
1
Sources
MLA
Style
College
Level
PLANNING, EXECUTION AND CONTROL CAPABILITIES IN A REAL-WORLD PROJECT
5
Pages
5 days
Urgency
10
Sources
Harvard
Style
PHD
Level
Related Management essays
- Strategies for Managing Disaster and Emergencies in Floodplain Areas essay
- Cash Flow Management essay
- Strategic Human Resource Management Analysis essay
- Unions and management essay
- Emergency Disaster Management essay
- Hedging for Multinationals essay
- Three Easy Ways to Improve Time Management essay
- Value and Risk Management essay
- Agile vs. Project Manager essay
- Cross Cultural Management essay
-