Weighted Average Cost of Capital Analysis of Bendigo Bank

Another option is the issuing of preferred stock, the company’s common stock is already overvalued in the market; therefore, sourcing additional capital through common stock might result to lower proceeds.

The purpose of this report is to provide a financial analysis of Bank of Queensland (BOQ) taking into consideration its competitive strategic responses, corporate governance and its overall financial performance. The current corporate governance of the bank is discussed in line with ASX CGC principles and recommendations. The financial analysis is conducted through comparing profitability ratios from its annual reports. The results show that BOQ has achieved a strong margin (22%) and shareholder returns (6.3%) and is working towards attaining diversification. It currently has a very minor focus on the sustainability due to low carbon footprint but is thriving to move towards a more sustainable environment. BOQ should create a carbon disclosure checklist (See Appendix 1) to determine the extent to which these variables have on climate change.

2. Considering Mary’s need of assurance, it is possible that Mary would prefer other forms, like bond or preferred share, which have more assurance to repay her investment.

The Jones Company plans to issue preferred stock with a perpetual annual dividend of $5 per share and a par value of $30. If the required return on this stock is currently 20%, what should be the stock's market value?

Thus the WAVG Cost of Debt (including L/T debt and preferred stock) = rd = 8.633%

This report will explain what is and how the WACC works and which methods to use for this particular company, AstraZeneca, with relevant data reference.

The relationship between the yields on the two preferreds and between the preferreds and debt consistent with their risk to investors as the sinking fund has a lower risk rate than that of the preferred stock. Furthermore, an increase in the percentage flotation cost has a greater impact on the sinking fund rather than perpetual preferred as it alters the

380). MRPS impose an obligation that requires the issuer to transfer assets or issue into equity shares. Unless the redemption of redeemable stock is required to occur only upon the liquidation or termination of the reporting entity, the stock should be classified as a liability. (Schroeder, Sevin, & Schauer, 2006) The GAAP treatment of preferred stock does affect companies that are closely held, non-public companies. Large firms that are under this category do issue MRPS, as the result of this, the effect of this new standard as potentially eliminating the net worth of the non-public companies that have issued MRPS. (Schroeder, Sevin, & Schauer, 2006) The other issue at the beginning of the conversion of MRPS from not being reported as a liability to being required to report the MRPS is a liability on the balance sheet. This would have caused debt covenant violations, which would have hampered the firm’s ability to borrow additional debt. “Not only will firms’ balance sheets show an increase in liabilities, but also ratios related to a firm’s debt will be affected, as well. Debt-to-equity ratios and debt-to-asset ratios will deteriorate as a result of FAS-150, which could jeopardize bond and loan covenants,” (McCarthy, Schneider & Seese, 2004).

After all of the common stock has been issued, companies start to deal out preferred stock. A preferred stock is an important equity security that has properties as both equity and a debt instrument and is basically considered a hybrid instrument. Before the common stock owners, the preferred stock owners supplied their dividends. If the company ceases to do business, and liquidates, the preferred stock owners are repaid the money, in which they invested before the stockholders are balanced. The main disadvantages of preferred

Preference share refers to stock which are issued for ordinary share. One of key benefit of owning preference share is that shareholder receives the dividend prioritize than common shareholder. Moreover, if the company goes bankrupt, the preference shareholders are able to claim greater amount than common shareholder. However, one of major difference between preference share and common share is that preference shares do not obtain any voting rights.

Preferred stock is the stock that provides for preferential treatment of dividends. Preferred stock holders receive dividends before common stockholders (Glandon, 2010). Preferred stockholders typically receive a set amount of dividends per year. If a company is operating at a high profit, preferred stock holders receive less in dividends than a common stock holder. If a company is not operating at a high rate, the preferred stock holders will receive a higher return than the common stockholders.

Certain forms of preferred stock, and to a limited extent debt, can also serve as capital.

Preferred shares act like a hybrid security, in between common stock and holding debt. Preferred stock can (depending on the issue) be converted to common stock and have access to accumulated dividends and multiple other rights. Preferred stock also has access to dividends and assets in the case of liquidation before common stock does.

Moreover, since it is convertible preferred stock, it allows the investor to exchange preferred stock to common stock at a specific price and at the discretion of the shareholder. So,

The Bank provides universal banking services with core activities in corporate and retail banking. The rapid increase in total assets by 72%, customer deposits by 64% and net loans by 70% over 1Q 2013 suggests that the Bank merged with another bank. While competition in the Polish banking sector remains intense, the merged bank is likely to benefit from a more diversified revenue structure, stronger origination capacity and some cost benefits. The Bank had total assets of PLN 106.1bn (EUR 25.6bn), equity of PLN 14.5bn (EUR 3.5bn) and generated net income of PLN 2.0bn (EUR 477m) in 2013.