Corporate Finance Essay

7805 Words May 24th, 2011 32 Pages
Table of content Executive summary

1.Introduction 4 1.1. Overview of Adelaide Brighton Limited 4 1.1.1. History 4 1.1.2. Industry 4 1.2. Major competitors 5 1.2.1. Boral Limited 5 1.2.2. Fletcher Building Limited 5 1.2.3. Brickwork Limited 5

2.Capital structure 6 2.1. Leverage 6 2.1.1. Current ABC’s leverage 6 2.1.2. Recent history of ABC’s leverage 6 2.2. ABC’s capital expenditures and its financing 9 2.3. Comparison of ABC’s capital structure with similar companies 10 2.4. Characteristics of the company influencing the leverage policy 11 2.4.1. Tax advantage 11 2.4.2. Corporate tax rate 11
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1.1.1 History

On 22/01/1960, the company was merged into South Australia under the name of Adelaide Cement Holdings Ltd. It was formed from the incorporation between the Adelaide Company and the Brighton Company – two independent South Australia companies.
On 05/07/1960, the company was listed on the Australian Securities Exchange and become a member of the S&P/ASX 200 Index.
On 31/12/2009, Adelaide Brighton Company’s joint ventures included Sunstate Cement Ltd, Independent Cement and Lime Pty Ltd, Alternative Fuel Company Pty Ltd, E.B. Mawson & Sons Pty Ltd and Lake Boga Quarries Pt Ltd, Burrell Mining Services JV and Batesford Quarry.
In 1882, the Company produced the first production of cement in Australia at Brighton, near Adelaide, South Australia. And today, the Company operates cement and lime in all Australia states, the Northern Territory and in the Hawaiian Islands with the number of employees makes up around 1500 peoples. The Company also currently manufactures a wide range of pipe, wire and related products in New Zealand.
1.1.2 Industry

The major industry of company is the production of clinker, cement and lime products; ready mixed concrete and aggregates and masonry products. The company divides its products into two main segments: Cement, Lime and Concrete; and Concrete Products. Moreover its major end-use markets include:

• Residential and

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