Corporate Finance Assessment 2022

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Authors Note:

CORPORATE FINANCE
1
Table of Contents
Introduction:...............................................................................................................................2
Discussing the main reason behind the undertaking of the IPO:...............................................2
Critically evaluating the statement that IPOs are a costly way of raising long term finance for
corporations:...............................................................................................................................4
Level of IPO activity in Australia compared with Market conditions:......................................6
Analysing the performance of IPOs over the period of three years:..........................................8
Analysing the Dividend policy of the organisation over the period of three years:..................9
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

CORPORATE FINANCE
2
Introduction:
The assessment evaluates the relevant level of IPOs that has been launched during
2013, where all the relevant information regarding the requirements of the funds is mainly
evaluated from the prospectus of the IPO. The IPO is mainly conducted by companies to
gather the required level of funding for their operations. In addition, the analysis has been
conducted on the overall change in cost of equity that occurs after the completion of the IPOS
by the company. In the similar process, the overall analysis has been conducted for
addressing the level of under-pricing there his currently being present in the IPOs during their
initiations. The implications of the under-pricing in IPOs have been conducted, where it is
considered to be one the major problems for the companies, which minimise their capability
to gather the required level of funding from investment. increase the acquisition of over the
period of time.
Discussing the main reason behind the undertaking of the IPO:
Company
Name Industry
Date
of
IPO
Amount
intended
to raise
Amount
actually
raised The purpose of the funds
Ozforex
Diversifie
d financial
Oct-
13 $439.4m $480.0m
The main purpose of the fund is to give
opportunity to current shareholders to
release their profits, reduce debt, increase
working capital and attract and retain
quality staff
Nine
Entertain
ment
Corporati
on Media
Dec-
13 $643.3m $697.3m
The main purpose of the offer is liquid
market for its Shares, funds to repay, in
part, NEC’s existing debts and pay the
Offer costs, repayment of debt drawn,
payment to SaleCo, payment of the costs
associated with the Offer, and increase in
cash and cash equivalents;
GDI
Property real Estate
Dec-
13 $567.7m $567.7m
Providing seed investors with the
opportunity in Rollover offer and stapled
securities. The fund is acquired for
working capital, and reduce debt

CORPORATE FINANCE
3
The initial public offering information has been highlights in the above table about the
three IPOs that was conducted during 2013, which was completed during same year. The
analysis of the table has indicated about the overall purpose of the IPO, which is the main
reason behind the company initiating the relevant IPO. The overall process is mainly initiated
when the organisation requires relevant funding for its operations and is able to acquire the
required funding for its operations. One of the major reasons behind the IPO initiation for the
reduction in debt capital that is intended by the management, as higher debt capital will
increase interest payments and erode the income that can be generated from operations. The
IPO is also initiated when the company intends to increase the level of cash, working capital
and funds that would be utilised for fuelling their expansion (Asx.com.au, 2019). In addition,
the analysis also indicated that only GDI property has acquired the anticipated funding from
their IPO. On the other hand, the other two companies were not able to attain anticipated
funding from the IPO, which was due to the low level of pricing for their share price.
The prospectus of Ozforex, Nine Entertainment Corporation and GDI Property has
mainly stated about the level of debt reduction that would be conducted by the companies
after acquiring the required level of funding’s. The prospectus also revealed that all the three
companies wanted to increase their exposure in capital market and which is the main reason
behind the IPO that was initiated by them during the year of 2013. The initial pricing of
Ozforex was at $2, Nine Entertainment Corporation was at $2 .35 and GDI Property was at
$1. However, from the analysis of the first day trade it has been detected that the overall
share price value of Nine Entertainment Corporation and GDI Property mainly declined to
new levels from their initial price offering (Asx.com.au, 2019).
Ozforex 2014
Growth(retention) 14.0%