The company’s dividends have also increased over the past year and this shows a level of improvement and bettered operations. The calculation of the CAPM highlights that Super Cheap Auto pays out a higher level of return than the market while the minimum return expected by the shareholders is 9.30%. Also based on the calculation of the WACC, it has been noted that the company requires a minimum return of almost 10.50% from all new projects and this is the rate to be utilised for the investment appraisals in the future.
Super Cheap Auto deals with retailing of cars in Australia and New Zealand. This paper aims at analysing the company and discussing the financial aspects of the company. The paper will begin with an overview of the company followed by the current activities of the company. The paper will also discuss the company’s capital structure and aspects of debt and equity that the company operates with. Calculation of the capital asset pricing model and the weighted average cost of capital of the company will also be discussed.
Super Cheap Auto Group Limited is a retailer of car products. The company caters to the markets of Australia and New Zealand and provides the country with excellent brands of vehicles as well as automotive parts. The company falls under the NAICS codes of 441310 – which deals with the Automotive Parts and Accessories Stores. Also the SIC Codes that the company operates under are: 5013 – Motor Vehicles Supplies and New Parts Industry Report, 5531 – Auto and Home Supply Stores Industry Report and 5731 - Radio, Television, and Consumer Electronics Stores industry report (High Beam Business, 2010).
The company was started as an automotive parts and accessories retailer in Queensland in 1974. Over the years the company has seen immense growth and now operates in over 212 outlets and the in almost every state