CORPORATE FINANCE.

Running Head: CORPORATE FINANCE 1
Corporate Finance
(Student Name)

CORPORATE FINANCE 2
Table of Contents
Introduction......................................................................................................................................3
Calculation of Weighted Average Cost of Capital..........................................................................3
Analysis of WACC Calculation.......................................................................................................4
Gearing Ratio of the Company........................................................................................................5
Capital Structure Theory..................................................................................................................6
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

CORPORATE FINANCE 3
Introduction
Cann Group Limited is one of the established ethical leaders in emerging medical cannabis
industry of Australia. The company as established in the year 2014 as well as it is the leading
corporation to be delivered by a Cannabis Research Licence by the Australian Government’s
Office of Drug Control in the year 2017. The company is following a entirely unified business
model with association contracts capitals as well as capabilities that make possible for the
company to set up foremost locus in cultivation plant genetics, production breeding, clinical
evaluation as well as manufacturing to enable the source of the medicinal cannabis for a series of
ailments as well as medicinal circumstances (Cann Group Limited, 2019).
In the following part there will be detailed analysis of the overall performance of the company
and the manner, the company manage its assets and liabilities that play an essential role in the
business. at the end efficient recommendation will be given to the company if required.
Calculation of Weighted Average Cost of Capital
A) Market Value Weights
Market Value Weights
Debt Equity Total
Market value of equity shares ($M) 250,563,886.00
Add: Retained Earnings (10,252,801.00)
Value of debt (short term borrowings+
long term borrowings) 927,674.00

CORPORATE FINANCE 4
Total 927,674.00 240,311,085.00 241,238,759.00
D. Weights 0.385% 99.62%
B) Cost of Equity and Debt
Cost of Equity: CAPM model
A. Risk free rate 2.75%
B. Market rate of return 6.6%
C. Beta 1.11
D. CAPM 7.03%
Cost of debt:
Net finance cost ($M) 8,381.00
Less: Tax @30% 2,514.30
After tax cost of debt 5,866.70