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For this assignment, you are encouraged to use the information provided on the firm's corporate websites together with the following sources: OneSource: Global Business Browser (available through...

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For this assignment, you are encouraged to use the information provided on the firm's corporate websites together with the following sources:
  • OneSource: Global Business Browser (available through Library Databases: http://library.csu.edu.au/services/find-books-and-other-resources/databases/subject/business)
  • Australian Stock Exchange http://www.asx.com.au/
  • Yahoo Finance https://au.finance.yahoo.com/
  • Reuters http://www.reuters.com/finance/markets
News sources such as those secured through the Library's ANZ Newsstream and Factiva databases are also likely to be relevant (http://library.csu.edu.au/services/find-books-and-other-resources/databases).Show all your calculation on the annexure.Your report should include:
  • A brief executive summary.
  • Introduction.
  • Body (use appropriate headings and sub-headings as relevant sign-posts).
  • Conclusion.
The following guide is useful in providing further information on effective report writing:https://interact2.csu.edu.au/webapps/blackboard/execute/displayLearningUnit?course_id=_22905_1&content_id=_1053355_1Required:APN Outdoor Group (APO) is an ASX Listed firm which specialises in offering advertising services including digital billboards, static roadside billboards, transit advertising, rail advertising and airport advertising throughout Australia and New Zealand (Reuters, XXXXXXXXXXIn 2016, the firm's sales exceeded AUD$300 million.Being part of the finance team of APN Outdoor Group, you have been tasked with reviewing and preparing a report on the capital structure of the firm and critique whether the firm has been successful in maximising wealth generation for shareholders. An excelloent source for information specifically on the APN Outdoor Group is the analysis provided by the Wall Street Journal athttp://quotes.wsj.com/AU/XASX/APO(Note: this site opens at an overview of APO.AX and historical financial data and ratios for the firm can be accessed by clicking on the link to 'All Sections' on the right).Your report should be 1000 words and cover the following areas:
  • Assume that for the 2016 year the firm APO.AU has a Beta of 1.3, that return on the ASX market was 7%, and that the yield on Australian Government bonds was 2.4%.
  • Using data from the firm's 2016 annual report:
    • Categorise the firm's current capital structure into debt and equity.
    • Calculate the firm's after-tax Weighted Average Cost of Capital.
  • Compare the firm's capital structure with at least one other firm operating within their industry.
  • Critically analyse other key financial ratios for APN.
  • Outline any significant changes to have occurred to the firm's capital structure during the past three years.
  • Critically evaluate the extent to which the firm has been successful in maximising wealth for shareholders in the past three years.
  • Discuss why it is important for the firm to minimise their cost of capital.
  • Recommend possible ways in which the firm could adopt an alternative capital structure and lower their cost of capital
Answered Same DaySep 25, 2019

Solution

David answered on Nov 25 2019
113 Votes
APN Outdoor Group (APO)
REPORT
Executive summary:
In this report, we are separating and researching the capital structure of the firm, APN Outdoor Group (APO) and in a general sense surveying whether the firm has been productive in extending wealth for its speculators and investors.
Through our examination we can express that APN outdoor has been unsuccessful in increasing the wealth of its investors.
Introduction
APN Outdoor Group (APO) is an ASX Listed firm which addresses noteworthy master in offering propelling associations including electronic affirmations, static roadside discharges, travel publicizing, rail progressing and plane terminal publicizing all through Australia and New Zealand (Reuters, 2017). In 2016, the gathering's income outflanked and came to AUD$300 million.
The central purpose of the report is to evaluate the capital structure of the organization through making figuring out its cost of capital, separation of capital and commitments parts and ratio analysis through financial ratios comparing debt and equity and so forth..
Report:
APN’s Capital Structure:
According to the 2016's yearly report, the capital structure of the organization consists of long outstanding non-convertible obligations, common share capital and withheld profits. The bifurcation of the same is as underneath:
    Details
    Amount (AUD thousands)
    Long term Debt
    102,667
    Equity Capital
    222,334
    Retained earnings
    41,296
    Total
    366, 297
This exhibits the firm is generously more relied upon its capital and not outside commitments. Nevertheless, if we consider the capital structure for last three years, there is a fluctuating example in whole deal commitment of the association. It extended from AUD 85,121 out of 2014 to AUD 102,677 out of 2016 with a dive in year 2016 at AUD 65,926.
Basically, there is an extension in financial specialists' esteem year on year from latest 3 years as a result of addition in held pay. It extended from AUD 216,274 in year 2014 to AUD 248,395 in...
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