Financial Management for Organisations : Assignment
Added on -2020-07-23
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Financial Management forOrganisations
Table of ContentsINTRODUCTION...........................................................................................................................1TASK ..............................................................................................................................................1A. Methods of estimating cost of capital................................................................................1Unite group equity: ...............................................................................................................2Computation...........................................................................................................................2B: Various valuation methods................................................................................................3C: Source of finance for growth............................................................................................5CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONFinance is utmost important part of every business. The effective management of financewould assists an organisation to increase their productivity as well as efficiency as a whole.Finance management refers to the efficient and other funds in such a manner in order toaccomplish their primary objectives. This can be done by proper planning, directing andorganising their financial resources in more effective manner. The project report is all about oneof the leading foundation “The Unite Group Plc”. All vital aspects related with internationalfinancial reporting standard are discussed under this project. Certain method of estimating cost ofcapital are explain in context to the mentioned company (Brigham and Houston, 2012).TASK A. Methods of estimating cost of capitalCost of capital is said to be an effective cost of Unite group plc overall capital which issaid to be the combination of both debt and equity. The require rate of return on investmentportfolios of existing securities. This is done to make analysis of new projects of a company. Thecost which would be helpful to use discounted future cash flows out of potential project andother opportunities to predict their total net present value. It is utmost important aspects for Unitegroup plc to make their upcoming investment decisions associated to new operations whichwould always provide more effective outcomes in order to get proper return that will increaseoverall cost of capital. It is related with WACC in the interest rate which a company uses to payon its current. It would hold that proper regulators which require to evaluate the weighted totalaverage costs of total capital to make ensure that a return to investors and sustain the assets base.This will examine overall techniques for predicating total costs of equity with total marketinformation (Heizer, 2016). Methods of cost of capital:Cost debt: All those cost of debts which is refers to the total cost or interest rate ofinterest amount which is to be paid by Unite group for the purpose of raising debt capital.Likewise, in a present situation the total interest paid for raising debt which is not taken intoaccount of debt. This is done so that the total interest is treated as expenditure and reduce fromoverall tax. KD = [(1-T)*R]*1001
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