Finance Management - Assignment Solution
Added on 2021-01-01
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MANAGING FINANCE
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1(a) Evaluation of use of fund from IPO(initial public offering) by three companies listed inASX..............................................................................................................................................1(b) Literature review on IPO are a costly way of raising long term finance for corporations.....2(c) Underpricing of the IPO at the end of first day......................................................................2(d) Pattern of IPO activity on ASX during the 2007 to end of 2017...........................................3(e) Evaluation of share price performance after the IPO.............................................................3(f) Changes in the above situation if additional dividend is given by the companies.................4CONCLUSION ...............................................................................................................................4REFERENCES...............................................................................................................................5
INTRODUCTIONManagement of finance is very important to proper allocation of fund. Companies use different methods to manage the financial needs(Denis, 2012). Eventually best way of raising thefund is the issuing of shares to the general public that is called initial public offering(IPO). Though this method of raising the fund has both the aspects negative and positive. Herein, the project report three companies from Australian securities exchange(ASX) are selected who offer IPO of $100 million. As well as this project report highlights on impact on companies financial performance due to issuing of IPO.MAIN BODY(a) Evaluation of use of fund from IPO(initial public offering) by three companies listed in ASX.Companies offer IPO in general public to raise their fund and they use this fund in multi-pal purposes(Pompian, 2012). The use of this fund can be for increasing the working capital orfor financial viable projects. Herein three companies which are listed in the ASX raises fund of$100 million during 8 years time period. The Spheria emerging company limited 's IPO exceedover $100 million which is a milestone(About IPO of Spheria emerging company limited.,2019).As per their annual report, they used their fund for their investment purposes. Due to this raisedcapital, company invested this amount of money for personal investment projects for enhancingthe liquidity.The second company is Tribeca resource private limited, that offer IPO to gain the capitalof $250 million(100 million shares @ $2.50 each share) (About IPO of Tribeca resource privatelimited,2019). The company is listed in the Australian securities exchange. The main purpose ofcompany to offer IPO was to support the new listed company Tribeca global natural resourcelimited. The third company is Nine entertainment co. limited, raised the capital of $577 millionthrough IPO (About IPO of Nine entertainment co limited, 2019). The objective of the companyto raise the capital through IPO was to increasing the working capital. Due to this fund, they areable to raise their working capital requirements.1
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