australian agriculture company.docx - 1. History of...

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1.History of Australian Agriculture Company LimitedAustralian Agricultural Company is a public-listed Australian company. It was establishedin 1824 as a land development company with the assistance of the British Parliament’sCrown Grant of 1,000,000 acres in the Port Stephens area of the Colony of New SouthWales. Australian Agricultural Company Limited is a beef company established in 1824.The company is an integrated cattle and beef producer and runs Australia’s largest herd ofwagyu cattle (AACo).In 1831 Shorthorn bulls were imported from England to develop the company herds. By1850, despite droughts, depressions and some heavy stock losses, the company’s sheepnumbers has risen to 114,118; cattle numbers to 8,306 and horse numbers to 1,436.During World War I, from 1914-1918, there was a large labour shortage especially forwool production and so the company shifted away from sheep to increase their cattleproduction. And hence it began selling southern estates and moving north, purchasingHeadingly Station at Urandangie in Queensland in 1916 and Avon Downs in the NorthernTerritory in 1921.By the end of Second World War, the company became a specialised cattle enterpriseand in the 1950’s Santa Gertrud is cattle were introduced to upgrade the Shorthorn herds.In the 1980’s, Braham cattle were introduced to the organisations new land in the Gulfregion.Today, AACo owns and operates a strategic balance of properties, feedlots and farmscompromising around 6.4 million hectares of land in Queensland and the NorthernTerritory. This equates to roughly 1% Australian land mass.2.What is WACC?
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companies. In simple words, it is the average cost that a company has to pay for the debtand equity capital that it borrows. The formula is calculated by multiplying the cost of twocapital sources with their weights and lastly adding the products together to figure thevalue of WACC (SK Mitra, 2011).Formula:WACC = (E/V) *RE+(D/V) * (Rd)*(1-Tc)Here,E: Total market value of the company’s equityD: Total market value of the company’s debtV: Total market value of the company (E+D)RE: Cost of equityRD:Cost of debtTc: Corporate tax rateAACo’s total equity: 913.389 millionAACo’s total debt: 480.292 million (2.891 million + 379.768 million + 25.791 million +7.324 million + 64.518 million)AACo’s total market value:Total equity + Total debt = 913.389 million + 480.292 million =1393.681 millionThe WACC for AACo is:(913.389/1393.681) × 1.9518 + (480.292/1393.681) × 3.07× (1 – 0.3)= 1.279 + 0.740 =2.019%Page2of12
3.Total market value of equity (E)

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Term
Spring
Professor
N/A
Tags
Finance, Capital Asset Pricing Model, Debt, Modigliani Miller theorem, Weighted average cost of capital, AACo

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