Task
This assessment task covers topics covered in week 1 to 10 and has been designed to ensure that you are engaging with the subject content on a regular basis.
Task
A). Pacific Brands has come a long way from manufacturing Dunlop bicycle tyres in 1893. Today, Pacific Brands is famous for marketing iconic brands including Bonds, Sheridan, Tontine, Berlei, Jockey, Voodoo and Dunlop Flooring. Headquartered in Melbourne Australia, Pacific Brands operates throughout Australia, New Zealand, China, Indonesia, and the United Kingdom.
Being part of the treasury team of Pacific Brands, your first exercise is to categorize Pacific Brands capital structure into debt and equity capital. Begin by going to http://www.pacificbrands.com.au/investor-relations/results-and-reports/results-and-reports-2014/ to obtain Pacific Brands 2014 Annual Report and Result Presentation.
If Pacific Bands marginal tax rate is 30%, what is its after tax Weighted Average Cost of Capital? Assuming Pacific Brand’s credit rating is AAA, what alternative capital structure would you recommend to lower the cost of capital to the company?
Show all your calculation and limit your report to 1,000 words. (15%).
Guidelines:
• You are to calculate cost of debt and cost of equity to work out Weighted Average Cost of Capital.
• To lower the cost of capital of the company, you could suggest an alternative debt and equity capital mix taking into account the company is AAA rated.
B) Financial management provides a framework for pursuing synergy between the functional responsibilities and financial resources of the business organisation. Contemporary organisations integrate strategic decision models capable of maximizing wealth generation. By reading an annual report of any one listed company, write any essay how you think the organisation is working towards this goal of maximizing wealth. Limit your essay between 1,000 to 1,500 words. (5%).
Rationale
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 explain and critique the objectives of financial management in contemporary organisations.
Marking criteria
Use the following rubric as guidance:
High Distinction Distinction Credit Pass Fail
Problem types/criteria (HD) (DI) (CR) (PS) (FL)
85% to 100% 75% to 84% 65% to 74% 50% to 64% 0% to 49%
Quantitative problems HD DI CR PS FL
Be able to identify and determine individual cost of capital and compute weighted cost of capital.
Identify and determine all the cost of capital and be able to compute the cost of capital correctly with no flaws. Identify and determine all the cost of capital and be able to compute the cost of capital correctly, with minor flaws. Identify and determine most of the cost of capital and be able to compute the cost of capital correctly, with minor errors Identify and determine some of the cost of capital and be able to compute weighted cost of capital, with substantial errors. Fails to identify and determine most of the cost of capital. Does not demonstrate the ability to compute weighted cost of capital, contains multiple and substantial errors.
Conceptual problems HD DI CR PS FL
Be able to analyse the elements in the business environment that at a particular time cause the cost of the individual source of capital to be high or low.
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 Clear and detailed analysis of all elements in business environment that cause cost of the individual source of capital to be high or low. Clear analysis of most key elements in business environment that cause cost of the individual source of capital to be high or low. Analysis lack explicit detail. Limited analysis of some elements in business environment that cause cost of the individual source of capital to be high or low. No analysis of relevant elements, fails to make links to the specific business environment.
Financial technology HD DI CR PS FL
Use appropriate financial technology to gather information and conduct financial analysis.
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. Data used competently and demonstrates integration into the analysis. The correct answers are derived using relevant sources and the results are presented in a clear and professional manner. Data sources used competently. Most correct results are derived using relevant sources but they may be some minor errors Data sources used competently. Most correct results are derived using relevant sources but they may be some major errors Data sources are not used competently. Most results are incorrect and derived using irrelevant sources. Contains major errors
Analyze business situations HD DI CR PS FL
Reach reasonable conclusion and recommendations on an alternative capital structure to lower cost of capital.
Quantitative and qualitative analysis persuasively and explicitly supports the conclusion and recommendations incorporating all factors determining cost of capital. Quantitative and qualitative analysis is use in a clear and concise manner to make reasonable conclusion and recommendations incorporating most of the factors determining cost of capital. Quantitative and qualitative analysis is used to make reasonable conclusion and recommendations incorporating most factors determining cost of capital. Quantitative and qualitative analysis is used to make reasonable conclusion and some recommendations. Quantitative and qualitative analysis is too simplistic or convoluted.
Financial research HD DI CR PS FL
Use of literature/market research/evidence of reading.
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, correctly formatted using APA style. Literature is presented with soundly based criticisms, in a descriptive way and indicates a good understanding of the literature. Literature is presented with some criticisms, in a descriptive way and indicates a few limitations of understanding. Literature/market research is presented with some criticisms, in a descriptive way and indicates few limitation of understanding. Reference list used, formatted in APA style with minor errors. No evidence of literature or irrelevant to the research question
Presentation
It is recommended that your name, student ID and page number be included in the header or footer of every page of any assignment.
You are also required to rename your assignment file before you submit via turnitin as per the following naming protocol:
SUBJECT CODE, SI, SURNAME, STUDENT ID, ASSESSMENT NUMBER, SESSION. For example – ACC512 SI PATEL 11554466 A3 201560.doc
Requirements
Assignments must be submitted through turnitin. The lecturer will announce if a hard copy submission is required addition to turnitin submission.
GET ANSWERS / LIVE CHAT