cooperate finance

8/10/2019 cooperate finance

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CORPORATE FINANCE FICB213

COCALAND HOLDING VS ORINTAL FOOD pg. 1

Table of ContentsEXECUTIVE SUMMARY .................................................................................................................................. 2

Introduction of the assignment ............................................................................................................... 2

Objectives ................................................................................................................................................. 2

COMPANY BACKGROUND ............................................................................................................................. 3

BOARD OF DIRECTOR .................................................................................................................................... 5

COMPANY BACKGROUND ............................................................................................................................. 6

Oriental Foods Industries Sdn. Bhd ......................................................................................................... 6

BOARD OF DIRECTOR .................................................................................................................................... 8

LITERATURE REVIEW ..................................................................................................................................... 9

FINDING 1: COMPARISON ON THE CAPITAL STRUCTURE ......................................................................... 14

HOW TO DETERMINE COST OF CAPITAL STRUCTURE ........................................................................... 14

THE STEPS TO DETERMINING CAPITAL STRUCTURES ARE AS FOLLOWS.......................................... 14

Finding 2: comparison on dividend policy ................................................................................................. 26

Dividend policy ....................................................................................................................................... 26

FINDING 3: THE EFFECT OF GEARING LEVEL /DECISIONS OF LEVERAGE AND PERFOMANCE AND PROFIT

ABALITY RATIOS ......................................................................................................................................... 30

CONCLUSION ............................................................................................................................................... 40

BIBLIOGRAPHY ............................................................................................................................................ 41APPENDIX ................................................................................................................................................... 42


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EXECUTIVE SUMMARYIntroduction of the assignment

This assignment is to access learners ability in applying the concepts and theories of Corporate

Finance as well as analyzing financial performance and issues in companies.

Objectives To relate the theory of capital structure and cost of capital, MM theory I and II and Miler

To evaluate the company capital structure and firm performance to generate profit as well

as sales to the company

To analysis and compare the capital structure between two firm in the same industry

To evaluate the effect of dividend policy on profitability ratios


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COMPANY BACKGROUND

Cocoaland Holding Berhad

Company logo

Cocoaland Industry Sdn. Bhd. Was incorporated in Malaysia on 22nd

August 1990 under the Act

as a private limited company. CISB commenced business on 2 March 1991 and is principally

engaged in the manufacturing trading of processed and preserved foods and fruits of all kinds.

LB Food Sdn Bhd. was incorporated in Malaysia on 23 January 1984 under the Act as a private

limited company. LBFSB is principally involved in the wholesale and retail of processed and

preserved foods.

B Plus Q Sdn. Bhd. was incorporated in Malaysia on 29 August 1985 under the Act as a private

limited company. The company is principally engaged in the business of manufacturing fruit

juice and foodstuffs.

Mite Food Enterprise Sdn. Bhd. was incorporated on 10 September 1980 in Malaysia under Act

as private limited company. The companys principal activities are that of the trading and

distribution of foodstuffs. MFESB acts mainly as the marketing and distribution arm of BPQSB.

Before CISB was formed, MFESB was the manufacture and distributor for LBFSB in 1980.

MFESB was absorbed by BPQSB concern on the manufacturing aspect. MFESB distributes to

the northem region of Malaysia.


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Example of Cocoaland products.


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BOARD OF DIRECTOR

DATO AZMAN BIN MAHMOOD

(Chairman/Independent Non-Executive Director)

DATO SRI KOH KIN LIP

(Independent Non-Executive Director)

LIEW FOOK MENG

(Executive Director)

LAU KEE VON


LAU PAK LAM

(Executive Director)LIEW YOON KEE

(Executive Director)TAI CHUN WAH

(Executive Director)CHOW KEE KAN @ CHOW TUCK KWAN


DATO NG JUI SIA

(Non-Independent Non-Executive Director)


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COMPANY BACKGROUNDOriental Foods Industries Sdn. Bhd

Company logo

Overview

Oriental Food Industries Sdn Bhd was established and incorporated in 1978. From our modest

beginnings, we have made our mark in the food manufacturing industry today holding the

leading position in the snack food and confectionery industry in Malaysia.

In a crowded marketplace, we remain focused on placing the needs and interests of our customer

first by manufacturing products that focuses on quality.

We believe that the key focus for success in this business depends on product quality, product

range, research and development, a highly quality workforce right from top management to the

operator level, sound marketing strategy, effective sales and advertising policies , competitivepricing, good domestic and international distribution network and most importantly the

commitment to excellence in all aspects of the company business, all of which are being

implemented and practiced in our organization.


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Example of Or iental F ood I ndustries Products


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BOARD OF DIRECTORChoon Yin Cheong

(Joint Company Secretary)

Mei Ying Chong


Siew Yeen Wong


Chen Chuan Son

(Managing Director,Executive Director)

Beng Lee Hoo

(Executive Director)Tong Eng Son


Tong Leong Son


Azizan Bin Husain

(Independent Non-Executive Chairman)

Keat Sear Lim

(Non-Executive Director)

Hwa Yu Lim



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LITERATURE REVIEWThis project paper stressed on three main issues namely the theory of capital structure, the theory

of cost of capital and the Modigliani-Miller Theory. Therefore, before we go further it is a good

idea to get a clear picture of these terms.

In finance, capital structurerefers to the way a corporation finances its assets through some

combination of equity, debt, or hybrid securities. A firm capital structure is then the composition

or structure of its liabilities.

A companys cost of capitalis simply the cost of money the company uses for financing.

If a company only uses current liabilities and long-term debt to finance its operations, then it

uses debt and the cost of capital is usually the interest rate on that debt.

The Modigliani-Miller theory, proposed by Fraco Modigliani and Merton Miller, forms the

basis for modern thinking on capital structure, though it is generally viewed as a purely

theoretical result since it disregards many important factors in the capital structure decision. The

theorem states that, in a perfect market, how a firm is financed is irrelevant to its value.

Consider two firms which are identical except for their financial structures. The first (firm U)is

unlevered: that is, it is financed by equity only. The other (firm L)is levered: it is financed partly

by equity, and partly by debt. The Modigliani-Miler theory states that the value of the two firms

is the same.


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Without taxes

VU=VL where VUis the value of an unlevered firm=price of buying a firm composed only of

equity, and VLis the value of a levered firm= price of buying a firm that is composed of some

mix of debt and equity. Another word for levered is geared, which has the same meaning.

MM theory that in a tax free environment, with perfect information and no costs for financial distress,

capital structure is irrelevant and changing a firms capital structure will not impact the firms

valuation.

MM assumes that the cost of equity is a linear function of the companys debt to equity ratio.

WACC = rA=(E/V)RE+(D/V)RD

rE=rA=(rA-rD)(D/E)


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VL is the value of a levered firm

Vu is the value of an unlevered firm

TcD is the tax rate (Tc) x the value of debt (D)

This means that there are advantages for firm to be levered, since corporation can deducts

interest payments. Therefore leverage lower tax payments. Dividend payments are non-

deductible.

rE is the require rate of return on equity, or cost of levered equity=unlevered

equity+financing premium.

rA is the company cost of equity capital with no leverage(unlevered cost of equity, or

return on assets with D/E=0)

rD is the required rate of return on borrowings, or costs of debt.

D/E is the debt-to-equity ratio

Tc is the taxe rate.


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The same relationship as earlier described stating that the cost of equity rises with leverage,

because the risk to equity rises, still holds. The formula however has implication for the

difference with the WACC. Their second attempt on capital structure included taxes has

identified that as the level of gearing increases by replacing equity with cheap debt the level of

the WACC drops and an optimal capital structure does indeed exist at a point where debt is

100%.

The following assumptions are made in the proposition with taxes:

Corporation are taxed at the rate Tc on earning after interest

No transaction costs exist and

Individuals and corporation borrow at the same rate.


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We define the value of the firm to be this sum. Hence the value of the firm, V is:

V=B+S

where B is the market value of the debt and S is the market value of the equity. B+S should be

equal to 100%. For examples:

Value of firm

Cost of Capital Structure: we use to calculate debt (B) is B or liabilities B+S total asset

: The balance of debt (B) is the amount if equity (S)

: B+S should be 100%

stock

60%

bond

40%

stock

40%

bond

60%


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Leverage (Book Value)

Total Debts

Total Assets

In year 2008, Cocoaland Holdings Berhad has a higher debt (B) compare to Oriental Food

Industries which amounted to 22.21%, 9% respectively. While for equity (S) Cocoaland Holding

Berhad has a lower equity which is 77.79% and 91% for Oriental Food Industries.

Year

Cocoaland Holdings Berhad Oriental Food Industries

Debt Equity Total Debt Equity Total

2008 25,191,366/

113,428,072

= 22.21% 77.79% 100%

10,473,764/

121,226,916

=9% 91% 100%

In year 2009,Cocoaland Holdings Berhad has a higher debt (B) compare to Oriental Food

Industries which amounted to 20.06%, 10% respectively. While for equity (S) Cocoaland

Holding Berhad has a lower equity which is 79.94% and 90% for Oriental Food Industries.

Year



2009 25,378,153/

126,537,172

= 20.06% 79.94% 100%

12,884,306/

130,723,679

=10%90%

100%


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Year



2010 26,152,977/

202,365,716

= 12.92% 87.08% 100%

9,249,323/

136,676616

=7% 93% 100%




In year 2012, Oriental Food Industries has a higher debt (B) compare to Cocoaland HoldingsBerhad which amounted to 21%, 17.34% respectively. While for equity (S) Oriental Food

Industries has a lower equity which is 79% and 82.66% for Cocoaland Holdings Berhad.

Year



2011 30,380,760/

219,050,224

= 13.87% 86.13% 100%

7,213,907/

145,099,665

=5%95%

100%



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Leverage (Market Value)

Total Debts

Total Debt +Common Equity

Year Cocoaland Holdings Berhad Oriental Food Industries

2008 25,191,366/

88,236,706+25,191,366

= 22.21%

26,455,615/

94,771,303+26,455,615

=21.82%

In year 2008,Cocoaland Holding Berhad is higher debt which is amount 22.21% than Oriental

Food Industries which amount 21.82%


2009 25,378,153/

101,159,019+25,378,153

= 20.06%

24,330,467/

106,393,212+24,330,467

=18.61%

In year 2009,Cocoaland Holding Berhad is higher debt which is amount 20.06% than Oriental

Food Industries which amount 18.61%

Year Debt Equity Total Debt Equity Total

2012 41,161,128/

237,320,735

= 17.34% 82.66% 100%

33,906,347/

159,266,086

=21%

79%

100%


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2010 26,152,977/

176,212,739+26,152,977

= 12.92%

22,814,631/

113,861,985+22,814,631

=16.69%

In year 2010, Oriental Food Industries is higher debt which is amount 16.69% than Cocoaland

Holding Berhad which amount 12.92%


2011 30,380,760/

188,669,464+30,380,760

= 13.87%

28,297,497/

116,802,168+28,297,497

=19.50%




2012 41,161,128/

196,159,607+41,161,128/

= 17.34%

33,906,347/

125,359,739+33,906,347

=21.27%




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Short Term Debts

Total Assets


2008 812,697/

113,428,072/

= 0.72%

15,981,851/130,723,679

=12.23%

In year 2008, Oriental Food Industries have a percentage is 12.23% compare to Cocoaland

Holdings Berhad the percentage is lower by 0.72%

Year Cocoaland Holdings Berhad Oriental Food Industries2009 14,920/

126,537,172

=0.012%

11,446,161/

130,723,679=8.76%

In year 2009, Oriental Food Industries have a percentage is 8.76% compare to Cocoaland

Holdings Berhad the percentage is lower by 0.012%


2010 NONE 13,565,308/64,911,602

=20.09%

In year 2010, Oriental Food Industries have percentage is 20.09% but Cocoaland Holdings

Berhad have none value for the year because the Short Term Debt is Zero.


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Long Term Debts

Total Assets

Year Cocoaland Holdings Berhad Oriental Food Industries2008 1,202,892/

113,428,072/

= 1.06%

10,473,764/121,226,918

=8.64%

In year 2008, Oriental Food Industries higher amount which is 8.64% then Cocoaland Holding

Berhad are lowest which amount 1.06%


2009 10,764/

126,537,172

=0.0086%

12,884,306/

130,723,679

=9.86%

In year 2009, Oriental Food Industries higher amount which is 9.86% then Cocoaland Holding

Berhad are lowest which amount 0.0086%


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2010 NONE 9,249,323/

64,911,602=14.25%

In year 2010, Oriental Food Industries higher amount which is 9.86% but for Cocoaland no value

for long debt.


2011 NONE 7,213,907/

145,099,655=4.97%

In year 2011,Oriental Food Industries higher amount which is 4.97% but for Cocoaland no value

for long debt.

.


2012 3,053,000/237,320,735

=12.86%

6,195,505/159,266,086

=3.89%

In year 2012, Cocoaland Holdings Berhad have a percentage is 12.86% compare to Oriental

Food Industries the percentage is lower by 3.89%


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Total Debts

Total Equity


2008 25,191,366/

88,236,706

= 28.55%

26,455,615/

94,771,303

=27.92%

In year 2008,Oriental Food Industries is higher amount which is 27.92%, Cocoaland Holdings

Berhad is amount 28.55%


2009 25,378,153/

101,159,019

= 25.09%

24,330,467/

106,393,212

=22.87%

In year 2009,Cocoaland Holdings Berhad is higher amount which is 25.09%, Oriental Food

Industries is amount 22.87%


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2010 26,152,977/

176,212,739

= 14.84%

22,814,631/

113,861,985

=20.04%

In year 2010 Oriental Food Industries is higher amount which is 20.04%, Cocoaland Holdings

Berhad is amount 14.84%


2011 30,380,760/

188,669,464

= 16.10%

28,297,497/

116,802,168

=24.23%

In year 2011, Oriental Food Industries is higher amount which is 24.23%, Cocoaland Holdings

Berhad is 16.10%.


2012 41,161,128/

196,159,607

= 20.98%

33,906,347/

125,359,739

=27.05%

In year 2012, , Oriental Food Industries is higher amount which is 27.05%, %, Cocoaland

Holdings Berhad 20.98%


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Finding 2: comparison on dividend policy

Dividend policy

Once a company makes a profit, management must decide on what to do with those profit. They

could continue to retain the profit within the company, or they could pay out the profit to the

owners of the firm in the form of dividends.

Once the company decides on whether to pay dividends they may establish a somewhat

permanent divided policy, which may in turn impact on investors and perception of the company

in the financial markets. What they decide depends on the situation of the company now and in

the future. It also depends on the preferences of investors and potential investors

For this project paper, we need to analyse 3 type of dividend which is dividend per share,

dividend yield and dividend payout for Cocoland Holding and Oriental Food Industries for five

years


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Year Cocoland holding Berhad(cents) Oriental Food Industries(cents)

2008 4 3.5

2009 10 3.5

2010 4.4 2

2011 5.5 2

2012 6.25 3

In year 2008, Oriental Food Industries lowest amount 3.5 cents compared to Cocoaland

Holding Berhad which amount 4 cents. In years 2009, dividends per share for Oriental Food

Industries still maintain amount 3.5 cents but Cocoland Holding Berhads dividend increase 10

cents because share that company offer have a large amount. In year 2010 Oriental FoodIndustries decrease 2 cents same years 2011, but Cocoland Holding berhad have decrease 4.4

cents in year 2010 then 2011 the amount is increase 5.5 cents. In year 2012, Oriental Food

Industries increase 3 cents, for Cocoland Holding Berhad also increase which amount 6.25 cents

Dividends per share = dividends

No. of share


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yeas Cocoland Holdings Berhad Oriental Foods Industries

2008 3,552,000/0.04

0.52

= 170,769,230.31

4,200,000/0.035

0.07

= 171,428,571.40

2009 6750,000/0.10

1.31

=51,526,717.56

1,574,998/0.035

1.43

=31,468,491.51

2010 4,725,000/0.044

2.24

=44,010,804.77

5,174,998/0.02

1.62

=159,722,160.50

2011 6,735,295/0.055

2.18

=56,174,270.23

5,700,000/0.02

1.50

=190,000,000.00

2012 13,727,996/0.0625

2.31=95,085,686.58

4,800,000/0.03

1.67=95,808,383.23

In year 2008, Oriental Food have higher dividend than Cocoland Holding Berhads this is because

their profit are lowest. In 2009, Cocoland Holding Berhad highest than Oriental Food Industries.

Dividend Yield = Annual Dividends Per Share

Share Price


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In year 2010 until 2012 dividend for Oriental Foods Industries highest than Cocoland Holding

Berhad

Year Cocoland Holdings Berhad Oriental Food Industries

2008 004 cents

7.24

= 0.55

0.035 cents

7.7

=0.0045

2009 0.10 cents

16.41

=0.61

0.035 cents

16.30

=0.0021

2010 0.044 cents

7.39

=0.60

0.02 cents

20.06

=0.0097

2011 0.055 cents

11.18

=0.50

0.02 cents

14.50

=0.0014

2012 0.0625 cents

12.36

=0.51

0.03 cents

21.81

=0.0014

In year 2008, Cocoland highest amount is 0.55 than Oriental is 0.0045. In year 2009,

Cocoland maintain the highest dividend is 0.61 compared to Oriental which is 0.0021. In year

2010, Cocoland still have highest dividend payout ratio which is 0.60 but for Oriental still have

Dividend Payout Ratio = Dividends

Net Income


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lowest amount 0.0097. In year 2011, Cocoland which amount 0.50 for Oriental amount 0.0014. It

also same situation happened for Oriental are dividend is 0.51 compared to Cocoland only have

0.0014 dividend payout ratio in 2012.

FINDING 3: THE EFFECT OF GEARING LEVEL /DECISIONS OF

LEVERAGE AND PERFOMANCE AND PROFIT ABALITY RATIOS

1.Net Profit Margin

A ratio of probability calculated as net income divided by revenues, or net profits divide

by sales. it measures how much out of every dollar of sales company actually keeps in

earnings

Profit margin is very useful when comparing company in similar industries. A higher

profit margin indicates a more profitable company that has better control over its cost

compares to its competitors

0.84

0.52

1.08

0.83 0.86

0.72 0.73

1.15

0.70.76

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2008 2009 2010 2011 2012

Oriental Food Industries

Cocoland Holdings

Net Income

Total Operating Revenue


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Based on the graph above net profit margin for Cocoland Holding Berhad is higher than Oriental

Food Industries. In year 2008 the net profit for Cocoland and Oriental Food is 0.72 and 0.84

respectively. Cocoland Holdings starts to increase from 2009 until 2010 are 0.73 to 1.15 and

Oriental Food increase from 0.52 to 1.08. For years 2011 both company decrease to 0.7 and

0.83 and increase back in the year of 2012 to 0.76 and 0.86 respectively.

2. Gross Profit Margin

Gross Profit Margin shows how well the firm management control it expenses to

generate profits

The higher the gross profits margin becomes, the more funds are available for

expenditures and profits.

Based on the graph, Cocoland Holdings is higher than Oriental Food in the year of 2010 which is

1.62 and 1.16 respectively. From year 2008 to 2009, Cocoland Holdings and Oriental Food gross

profit margin decrease to 0.38 and 0.95. The gross profit margin increase to 1.00 for Cocoland

Holdings and 1.08 for Oriental Food.

0.96 0.95

1.16

1.06 1.08

0.9

0.38

1.62

0.72

1

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2008 2009 2010 2011 2012


Cocoland Holdings

EBIT

Total Operating Revenue


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3. Net return on Asset

A financial ratio that shows the percentage of profit a company earns in relation to its

overall resources

it is commonly defined as net income divided by total assets

Based on graph above, for year 2008 Cocoland Holdings is higher than oriental food which is

0.08 and 0.04 respectively. In the year of 2009 both company Net Return of Assets increase to

0.16 and 0.11. In 2011 there are decrease for Cocoland Holdings and Oriental Food to 0.06 and

0.09 respectively. On 2011 there are dramatically increase of Net Return On Assets for

Cocoland Holdings and Oriental Food which is 0.10 and 0.62 respectively. In year 2012,

Cocoland Holdings and Oriental food net return on assets is equal which 0.09 is.

0.04

0.110.09

0.62

0.090.08

0.16

0.06

0.1 0.09

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2008 2009 2010 2011 2012


Cocoland Holdings

Net Income

Average Total Assets


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4. Gross Return on Assets

An indicator of how profitable a company is relative to its total assets.

ROA gives an idea as to how efficient management is at using its assets to generate

earnings.

Based on the graph, Oriental Food Industries has the higher gross return on asset in 2011 which

is 0.79 compare to Cocoland which is 0.10. In 2008, Oriental Food Industries has 0.05 compare

to Cocoland which is 0.10. In 2009, oriental food industries gross return on asset increase to

0.08 and remain constant until 2010. For Cocoland Holdings, only increase to 0.11 and for 2010

and 2011 its remain constant 0.10 for 2 years. For the year of 2012, there are dramatically

decrease for Oriental Food Industries which is 0.11 and Cocoland Holdings Increase to 0.18.

0.10.08 0.08

0.1

0.18

0.050.08

0.1

0.79

0.11

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2008 2009 2010 2011 2012


Cocoland Holdings

EBIT

Average Total Assets


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5. Net Return on Assets (ROA)

Net return of asset is a percentage of profit a company earns in relation to its overall

resources.

Based on the graph above, Oriental Food industries net return on assets is higher than cocoland

holdings berhad for 5 year. In 2008, cocoland only has 0.81 compare to oriental food industries

which is 0.86. In 2009 oriental food industries and cocoland has 0.83 and 0.79 respectively.

Both company net return on assets increase to 1.05 and Cocoland increase dramatically to 0.71.

0.860.83 0.97

0.85

1.05

0.810.79

0.8

0.09

0.71

0

0.2

0.4

0.6

0.8

1

1.2

2008 2009 2010 2011 2012


Cocoland Holdings

Net Profit Margin x Assets Turnover


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6. Return on equity (ROE)

The amount of net income returned as the percentage of shareholders equity. Return

on equity measures a corporation's profitability by recalling how much profit a company

generates with the money shareholders have invested.

Based on the graph above return for Cocoland Holdings Berhad is higher than Oriental Food

Industries in year 2009. In year 2008 for Cocoaland and Oriental Food is 0.10 and 0.05

respectively. Cocoland Holdings starts to increase in 2009 to 0.21 and oriental food increase to

0.10. For year 2010, cocoland holdings start to decrease dramatically to 0.07 while for oriental

food it increase to 0.11. In 2012, both company has same return on equity which is 0.11

0.05

0.10.11

0.08

0.110.1

0.21

0.07

0.10.11

0

0.05

0.1

0.15

0.2

0.25

2008 2009 2010 2011 2012


Cocoland Holdings

Net Income

Average Stockholder Equity


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CALCULATION ON FIRM PERFORMANCE

I. Oriental Food Industries

Leverage Formula 2008 2009 2010 2011 2012

Net

Profit

Margin

=0.84

=0.92

=1.06

=0.83

=0.86

Gross

Profit

Margin

=0.96

=0.95

=1.16

=1.06

=1.08

Net

Return

On Asset

=0.04

=0.11

=0.09

=0.62

=0.09

Gross

Return

On Asset

=0.05

=0.11

=0.10

=0.79

=0.11


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Return

On Asset

(ROA)

=0.86

=0.83

=0.97

=0.85

=1.05

Return

On

Equity

(ROE)

=0.05

=0.10

=0.11

=0.08

=0.11

II.

Cocoaland Holdings Berhad

Leverage Formula 2008 2009 2010 2011 2012


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Net Profit

Margin

=0.71

=0.75

=1.15

=0.70

=0.76

Gross

Profit

Margin

=0.90

=0.38

=1.62

=0.72

=1.00

Net

Return

On Asset

=0.08

=0.16

=0.06

=0.10

=0.09

Gross

Return

On Asset

=0.10

=0.08

=0.08

=0.10

=0.18

Return

On Asset

(ROA)

0.71


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=0.81 =0.79 =0.80 =0.06 =0.71

Return

On Equity

(ROE)

=0.10

=0.21

=0.07

=0.10

=0.11

CONCLUSION

Based on our observation between two consumer companies which is Oriental Food Industries and

Cocoaland Holdings Berhad, the most profitability company is Cocoaland Holdings Berhad in year 2010

compared to Oriental Food Industries. However, they achieved their profitability at the same year. Then,

net return on asset for both company are increase in year 2011 but for the year 2012 both company are

equal in percentage. Oriental Food Industries have higher percentage on return on asset than Cocoaland

Holdings Berhad for 5 years but both of the companies have decrease in percentage in year 2011.

For return on equity, Cocoaland Holdings Berhad has higher percentage than Oriental Food Industries.

From the overall performance shows that Oriental Food Industries is better than the Cocoaland Holdings

Berhad because their WACC represent lower than the Cocoaland Holdings Berhad. In WACC, the lower


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the amount the company made represent the best performance. Furthermore, the increase and the

decrease of the company itself are depending on the market response immediately to all available

information.

Based on the dividend policy, as the company generates more profit, there will be more dividend payoutfor the shareholders.

BIBLIOGRAPHY

I. BOOK

BookModigliani, F; Miller, M. (1958). The Cost of Capital, Corporation Finance

and the Theory of Investment. American economic review (American economic

association)

Brealy, Richard A; Myers, Stewart C. (2008) [1981]. Principles of Corporate

Finance (9th edition

). Boston : McGraw-Hill/Irwin

Corporate Finance Module Sem 1 2013/2014

II. INTERNET

http://financetrain.com/modigliani-miller-and-capital-structure-theory

http://www.studyfinance.com/lessons/dividends/

http://investinpassiveincome.com/how-to-pick-a-top-dividend-company-for-

dividend-income-part-1/
http://financetrain.com/modigliani-miller-and-capital-structure-theoryhttp://www.studyfinance.com/lessons/dividends/http://www.studyfinance.com/lessons/dividends/http://financetrain.com/modigliani-miller-and-capital-structure-theory


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APPENDIX

cooperate finance

Documents

Transcript of cooperate finance