...COVENTRY UNIVERSITY | CORPORATE FINANCE – MO8EFA | Coursework | | | | | | | Work Done By:Riddhi Maniyar (5982620)Donna Nair (5943632) | | | | (27-11-2014) | | Table of Content Sr. No. | Content | Pg. No. | 1. | Task 1Food-For-Life and its Objectives | 3-4 | 2. | Task 2Preparation of Financial Statements and Analysis * Projected Cash Flow Statement * Projected Income Statement * Projected Financial Position (Balance Sheet) | 5-10 | 3. | Task 3Calculation of Cost of Capital and its Explanation | 11-12 | 4. | Appendix 1 | 13-14 | 5. | Bibliography | 15 | Task1 Modern financial management theory assumes that shareholder wealth maximization is the primary objective of a business. A business is carried primarily to maximize the wealth/profit of shareholders. The principle of shareholder wealth maximization states that the ultimate purpose and the immediate goal of the business concern must be to maximize the returns on equity share capital (R. Boatright, 2010). Most businesses rely upon borrowed money. A part of this is provided by the shareholders in the form of share capital. In return the shareholders expect an increase in the wealth in order to compensate the risk faced. By wealth maximization we mean either an increase in the market value of ordinary shares or in the form of dividends. It is a long-term objective. Many organizations instead of seeking shareholders wealth maximization seek to...
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