Corporate Finance Issues 2022

CORPORATE
FINANCE

INTRODUCTION
 Telstra Ltd is a telecommunications and technology company that has a
leading brand connectivity of media and content in Australia. The company
is aimed at delivering exceptional experiences for their customers.
 Wesfarmers is a Conglomerate industry of Australia and predecessor
industry of Coles group. It is the largest company in Australia in terms of
revenue.

Sources of Funds Raised by the
companies
Telstra Ltd
 Retained Earnings- Telstra group is sourcing its
fund from the profits generated by the business.
The dividends from the profits are not distributed
among the shareholders and instead, the
company raise its funds from these profits to do
business investments.
 Debt capital- Telstra source its funds by raising
debts in the form of bonds, short-term
commercial paper, loans, AUD private
placements and Finance leases (Telstra.com.au,
2020). Recently it has issues a 10 year long term
debt of EUR bond of worth $959.
 Equity Capital- Telstra release its company stock
to the shareholders. The shareholders invest
their funds in the company stock.
Wesfarmers Ltd
 Debt capital- Funds are raised by issuing global
market bonds and form various banking
facilities.
 Equity capital- The funds are raised from equity
capital. Some of the equity capital of
Wesfarmers is share capital, retained earnings
and reserves (Wesfarmers.com.au, 2020). The
company issue their shares and keep the
shareholder's reserves to source their fund.
They focus more on internal sources to fund
their business operations.

Evolution of Sources of Funds
Wesfarmers Ltd
The company has purchased more of its
reserved shares for its future use. These shares
include shares issued by the employees.
Therefore, capital reserves are used to gain
more profits. This debt has been raised from the
interest in the form of loans and borrowings. No
new bonds were issued in the current year. The
bank facilities were extended for three years as a
source of funds.
Telstra Ltd
The debt capital in the form of borrowings
includes; domestic borrowings, offshore
borrowings, commercial paper, finance leases
and bank loans. In 2018, Telstra Ltd formed a
new fund by investing with HarbourVest. This
investment has reduced capital commitments in
the future