HI5002 : Finance for Business Assignment
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Holmes Institute Sydney
Finance for Business (HI5002)
Added on 2020-05-16
HI5002 : Finance for Business Assignment
Holmes Institute Sydney
Finance for Business (HI5002)
Added on 2020-05-16
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Running head: FINANCE FOR BUSINESSFinance for Business Name of Student:Name of University:Author’s Note:
1FINANCE FOR BUSINESSTable of ContentsIntroduction......................................................................................................................................31.Brief description of the company............................................................................................32.Ownership-governance structure.............................................................................................3i.Substantial shareholders.......................................................................................................3ii.The main people involved....................................................................................................43.Calculation of Key Ratios........................................................................................................4i.Ratio Calculation..................................................................................................................4i.TA/OE Impacting on the relationship between ROA and ROE...........................................6ii.Rationale for ROE significantly greater than ROA..............................................................74.Using the information from the ASX website.........................................................................7i.Graph for movements in the monthly share price over the last two years...........................7ii.Comparison of movements in the companies’ share price index.........................................75.Research via the internet or financial/business publications...................................................86.Capital Asset Pricing Model....................................................................................................8i.Calculated beta (β) for the company.....................................................................................8ii.Rate of return for the companies’ shares............................................................................10iii.Rationale for conservative investment............................................................................107.Weighted Average Cost of Capital (WACC)........................................................................11
2FINANCE FOR BUSINESSi.WACC Calculation.............................................................................................................11i.Management’s evaluation of WACC..................................................................................11i.Amendments on gearing ratio.............................................................................................128.Dividend Policy.....................................................................................................................129.Letter of recommendation to the client..................................................................................12Conclusion.....................................................................................................................................13
3FINANCE FOR BUSINESSIntroductionThe learnings of the study have considered the essential activities of the operatingmarket. The application of the financial tools in the report are evident with the evaluation of keyratio taken from ASX website. The study further discusses on the evaluation of WACC and rateof return as per the stock price. The latter part of the report has discussed on the amendments ongearing ratio and maintenance of a preferred optimal capital structure.1.Brief description of the companyManhattan Corporation Limited is identified as the flagship Ponton uranium project which isapproximately located 200 Km northeast of Kalgoorie on the edge of the Great Victoria Desert inWA. The company is seen to be having 100% control for the exploration tenement underlaid bythe tertiary palaeochannels within the Gunbarrel Basin. These are considered as palaeochannels,which hosts several uranium deposits and drilled uranium. The Mineral resource estimate of thecompany is based on the “Manhattan’s air core” and “sonic drilling” of over 788 holes for55,553 metres of drilling along the palaeochannels immediately to the north of QVSNR from2009 to 2016 (Manhattancorp.com.au. 2018).2.Ownership-governance structurei.Substantial shareholdersThe highest substantial security holder of the company is understood with Alan JEggers and Associates with 23.74%. “Minvest Securities (New Zealand) Limited” isidentified as one of the substantial shareholders of the company with 17.05%. Some ofthe other substantial shareholders has been depicted with “Nicholas P S Olissoff” with
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