Briefly describe how you would calculate Aurubis’ weighted average cost of capital (WACC).
Analysis of the financial situation of the Aurubis Group
max 2800 words
This assignment requires an analysis of the financial situation of the Aurubis Group, one of the leading copper producers worldwide. The parent company is Aurubis AG, based in Hamburg, Germany. Company information is available from https://www.aurubis.com/en/download-center/all. For the purpose of this assignment, treat the entire group as if it were a single entity.
Provide a brief characterisation of the company.Put more emphasis on the financial situation (such as components of cash flows and the stock price) relative to other aspects (such as strategy or marketing),but do not ignore the latter.
Describe how the capital structure of the firm developed over time. What were the likely drivers of past capital structure changes? Could you identify a target capital structure and, if so, how?Check whether any of the main capital structure theories appear to apply to this firm. Justify your answer. Your analysis should cover the last ten years for which data is available.
What capital structure would you advise the firm to aim for, given its current situation? Should the firm adjust its current dividend policy?Justify your answer.
Calculate the cost of equity of Aurubis Group.Describe in detail what calculations you perform,what inputs you use and justify any assumptions you have to make.
Calculate the cost of debt of Aurubis Group.Describe in detail what calculations you perform,what inputs you use and justify any assumptions you have to make.
Briefly describe how you would calculate Aurubis’ weighted average cost of capital (WACC). No actual WACC calculation is required.
You may use information from any publicly available source.Make sure that all the sources used are being properly referenced.