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Capital Structure of RCR - Capital Asset Pricing Model (CAPM) - Accounting and Finance Assessment Answer
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Accounting and Finance Assessment Answer
Assessment task This assignment is about RCR Tomlinson Limited (hereinafter referred to as RCR), an Australian engineering and infrastructure company founded in 1898 and incorporated in 1979. The company employed 3400 people across Australia and is listed on the Australian Stock Exchange (ASX Code: RCR). The company raised $100,000,000 from its shareholders in August 2018, and in November 2018 company directors have decided to go into administration because the company failed in its efforts to secure additional funding. RCR was suspended on 22 November 2018.- Identify unsystematic risks for RCR.
- Using ten reference points, calculate and interpret the market risk (?) for RCR. Please include limitations of the beta coefficient you have calculated. Show your workings.
- Using the Capital Asset Pricing Model (CAPM), estimate and comment on the expected return for RCR shares. Clearly state your assumptions and limitations. Show your workings.
- Critically analyse the capital structure of RCR for the past five years, and state if it was optimal and the downfall of the RCR is attributable to its capital structure.
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