Finance PowerPoint presentation Assignments | College Homework Help

Questions

 

Requirements

 

Atlas Ltd is a FTSE250 company with over 500 employees. Atlas specialises in luxury yacht manufacture and is based in Naples Italy. It is one of the world leaders in its field. The senior management of Atlas want to expand their operations into South America and are considering building a subsidiary manufacturing hub at the port of Manzanillo Mexico, due to its skilled labour and links with East Asia.

 

The dockyard is expected to take two years to build and fit-out, with revenue expected to start at the end of the first year of production. The financial manager of Atlas is unsure of the best financing option(s) since the company has unissued capital stock and favourable debt market conditions. The favourable debt market is reinforced by Atlas strong business performance and below average industry gearing level.

 

 

You are currently an intern at Skansa Bank and your supervisor has asked you to:

 

• Produce a PowerPoint presentation together with notes to the slides, which critically examines the benefits and risks to Atlas Ltd of incorporating corporate debt into an existing portfolio of equity and debt. (1325 words and 10 PowerPoint slides)

 

 

PLEASE NOTE: Each student will be expected to produce a, which is applicable to

1. Atlas’s current investment consideration and incorporate relevant theory, business models and empirical evidence considered necessary.

 

1. Reference should be made to Atlas Group Ltd as an aid to the evaluation.

 

Above questions is basically on Capital Structures & acquisitions

• Gearing – Gearing ratios assess financial risk
• Implications of high gearing
• Simplifying assumptions
• The traditional approach
• Net Income approach

Theories

Miller and Modigliani:  Application to the question required with at least 2 graphs to state the benefits and the risk

Market imperfections to support report with a graph

• Optimal Capital Structures with a graph.

 

 

 

Conclusion

Equity & Debts

• If we incorporate. What are the benefits or risk of incurring more debts?
• Investment Consideration

Solution: