Criminal Justice System of the Philippines - 3958 Words

RESOURCE MATERIAL SERIES No. 53 THE ROLE AND FUNCTION OF THE PROSECUTION IN THE PHILIPPINE CRIMINAL JUSTICE SYSTEM Menrado Valle-Corpuz* INTRODUCTION The criminal justice system, essentially, is the system or process in the community by which crimes are investigated, and the persons suspected thereof are taken into custody, prosecuted in court and punished, if found guilty, provisions being made for their correction and rehabilitation. Prior to the advent of American sovereignty in the country, we had the Spanish law on criminal procedure. The Royal Decree of September 4, 1884, by virtue of which the Penal Code in force in the archipelago, as amended in accordance with the recommendations of the Code Committee, and its accompanying law—†¦show more content†¦Any person who—while in custody or otherwise deprived of liberty—is under investigation for the commission of an offense, has the following constitutional rights, among others: 1) He must be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice. If the person cannot afford the services of counsel, he must be provided with one. These rights cannot be waived except in writing and in the presence of counsel; 2) No torture, force, violence, threat, indimidation or any other means which vitiate the free will shall be used against him; secret detention places, solitary, in communicado or other similar forms of detention are prohibited; and 3) Any confession or admission obtained in violation of the foregoing shall be inadmissible in evidence against him. c. Refer the case and the suspects to the Office of the Public Prosecutor or Municipal Trial Court for preliminary investigation or directly to the Municipal Trial Court for trial and judgment. II. PROSECUTION PROCESS The investigation and prosecution of all cases involving violations of penal laws are lodged with the Department of Justice (DOJ) through its National Prosecution Service (NAPROSS). The DOJ is headed by the Secretary of Justice with three Undersecretaries assisting him. Aside from being the prosecution arm of the government, the DOJ shall have the following powers and functions: a. Act as principal law agencyShow MoreRelatedPersons Deprived of Liberty1523 Words   |  7 Pages2010 National Summit Declaration on Persons Deprived of Liberty Manila, Philippines â€Å"Collaborative Partnership in Enhancing the Dignity of Persons Deprived of Liberty† The participants, representing the Executive Branch, the Legislature, the Judiciary, other public institutions, civil society organizations, faith-based organizations and other partners, AFFIRMING the State’s constitutional obligation and adherence with international laws and covenants to protect and uphold fundamental rightsRead MoreCrime and Youth Care Facility1116 Words   |  5 PagesAMENDMENTS IN THE JUVENILE JUSTICE amp; WELFARE ACT OF 2006 (AFFIRMATIVE SIDE/ PRO – FOR DEBATE) Few days ago, the Senate approved on final reading a bill amending Republic Act No. 9344, otherwise known as the Juvenile Justice and Welfare Act of 2006, in order to improve its implementation. I AM IN FAVOR OF THIS GREAT ACT BY OUR LAWMAKERS. 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Hundreds of thousands of homeless people live on the streets as their shelter. Historically, homelessness has always been a problem in society. Homeless people were known as â€Å"the wondering poor†, â€Å"sturdy beggars†, and as â€Å"vagrants,† but it was not until the lateRead MoreHomelessness Thesis9057 Words   |  37 PagesHES Republic of the Philippines Pamantasan ng Lungsod ng Muntinlupa COLLEGE OF CRIMINAL JUSTICE NBP Reservation Poblacion, Muntinlupa City INTRODUCTION Homelessness is a critical issue that requires everyone’s attention. Hundreds of thousands of homeless people live on the streets as their shelter. Historically, homelessness has always been a problem in society. Homeless people were known as â€Å"the wondering poor†, â€Å"sturdy beggars†, and as â€Å"vagrants,† but it was not until theRead MoreA Study on the Effectivity of the Philippine Prison System10770 Words   |  44 PagesEFFECTIVITY OF THE PHILIPPINE PRISON SYSTEM ABELARDO ELEANDRO B. ALB IS, JR. F. 11ADRONA ALICE P. 11ARINO LEONIDES S. RESPICIO To the builders of this nightmare Though you may never get to read these words I pity you; For the cruelty of your minds have designed the bel!; If mens buildings are a reflection of what they are, this one portraits tbe ugliness of all humanity. If you only had some compassion! -grafitti written 011 the wall of American State Prison I. INTROD UCTION A system is said to beRead MoreEssay on The International Military Tribunal for the Far East849 Words   |  4 PagesThe International Military Tribunal for the Far East Before assembling here today the Members of the Tribunal signed a joint affirmation to administer justice according to law, without fear, favor or affection. We fully appreciate the great responsibility resting upon us. There has been no more important criminal trial in all history. Certainly we are not a Senate or a House of Peers met for the impeachment of a Verrus or a Hastings, but a court of our respective countries. On the otherRead MoreSocial Justice Society (Sjs), Petitioner, vs. Dangerous Drugs Board and Philippine Drug Enforcement Agency (Pdea), Respondents. Facts: in Its Petition for Prohibition Under Rule 65, Petitioner Social Justice Society (Sjs)1441 Words   |  6 PagesEN BAEN BANC [G.R. No. 157870, November 03, 2008] SOCIAL JUSTICE SOCIETY (SJS), PETITIONER, VS. DANGEROUS DRUGS BOARD AND PHILIPPINE DRUG ENFORCEMENT AGENCY (PDEA), RESPONDENTS. 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The Effects Of Sports Violence On Athletes - 1491 Words

When we talk about violence in athletics, we are referring to any form of physical act that is committed by or against the athletes at the time of athletic events. These acts go against the regulations of the athletics bodies that govern the sport. Such acts of violence in athletics involve both deliberate schemes to injure fellow athletes and actual harm or threats directed towards the athletes by the spectators. The act of engaging in violence by some athletes is an attempt to intimidate or injure the opponents. A number of players and coaches have for a number of years been accused of such plots as a way of trying to outdo their opponents. Many of such cases have been welcomed by strict legal measures such as bans from participating in a future sporting activities. Reinforcement is one of the root cause of violence in athletics. Athletes are reinforced to be highly aggressive while competing either in the field or the track by the coach and captain. Their desire to be successful athletes also contribute to the aggressiveness. Sometimes, this aggressiveness may spill over into their social lives. When these athletes exaggerate their aggressiveness and direct into to their opponents, this leads to violence. The aggressive behavior in the filed or tack might sometimes be carried into other areas outside the sports arena. This can be a public place, the place of work or the domestic environment. When the athletes transfer their hostile behavior into these avenues, it isShow MoreRelatedThe Damaging Effect Of Sports On Women924 Words   |  4 PagesThe Damaging Effect of Sports on Women When it comes to the topic of sports, many people would assert that sports are a tool that can be used to bring people together. However, in her essay, â€Å"We Don’t Like Football, Do We?† Mariah Burton Nelson argues that sports have created a platform where men can be brought together to diminish the ideas and worth of women. 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Multiple Regression Analysis Free Essays

Multiple regression analysis was used to measure the relationship between the cost of equity capital and the independent and control variables. It was found that the cost of equity capital is relatively lower when the index of CSR disclosure is higher, reason being immense CSR implementation minimizes the general risk of a company. It was concluded that CSR disclosure in the company’s annual reports reduces the cost of capital by reducing information asymmetry and subsequently reducing company’s risk which benefits both the investors and speculators. We will write a custom essay sample on Multiple Regression Analysis or any similar topic only for you Order Now According to Baimukhamedova and Luchaninova (2017) who examined the relationship between corporate disclosure and cost of equity capital on a sample of 37 largest and most liquid firms listed at Kazakhstan Stock Exchange for period 2008 to 2014, the study used multiple linear regression models. The findings indicated that firms with higher level of financial transparency are associated with significantly lower cost of equity capital. The results shown that firm on the Kazakhstan market reduce their cost of equity capital by increasing the level of their voluntary corporate disclosure. Moreover Stanwick (1998) studied the relationship between corporate disclosure and organizational size, financial performance and environmental performance. The objective of the study was to examine the relationship between social performance of the organization and the environmental performance of the organization. Data was collected from 1987 to 1992 and descriptive design was used. Corporate reputation index was constructed. The findings were that social performance was indeed impacted by the size of the firm, the financial performance of the firm and amount of pollution emissions released by the firms. 2.3.3 Corporate Social Responsibility Voluntary Disclosure and the Cost of Equity CapitalA study by Hossain and Hammami (2009) purported that financial results released are the foundation of an organization’s budget and performances. The analysis involves comparing a firms performance with that of the others firms in the same industry and evaluating trends over time. Financial analysis involves the use of simple mathematical techniques, an understanding and appreciation of business strategy and future prospects through and examination of financial statements. Financial ratios play a key role in financial management. The extent to which a firm’s uses debt financing is what is called financial leverage. Also Botosan and Plumlee (2002) investigated the relationship between cost of capital and annual reports disclosure, timely disclosure (quarterly or other published reports) and investors relations disclosures, they found a negative association for the annual report disclosure, their research showed that the cost of capital is positively related to timely reporting actions which could be attributed to the fact that timely disclosure increase the volatility of the share price by attracting transient investors who trade aggressively on short term earning , however they did not find association between cost of equity financing and investor relations disclosures. In evaluating the relationship between information asymmetry and financing methods (debt and equity financing) of firms listed on the Tehran Stock Exchange from year 2003 to 2010, Mahdi, Vahab and Hamin (2015), found that there no significant relationship between information and debt financing though information asymmetry is positively associated with debt financing, however there was a significant positive relationship between information asymmetry and equity financing. The study was done using secondary dataset of 61 firms were explored where debt and equity financing methods were adopted where data was extracted from financial statements of sample firms and was analyzed in excel and stata. The result of the study showed. In this study used stata and excel. Another study by Mangena, Jing and Tauringana (2016) investigated whether Intellectual capital and financial disclosure jointly affect the firms cost of capital for 125 UK firms listed on the London Stock Exchange (LSE) representing firms across industries from March 2004 to February 2015, data for measuring disclosure are drawn from annual reports. They used descriptive approach as their study methodology. The study found that IC disclosure is negatively related to the cost of equity, the relationship between financial disclosure and the cost of equity capital is magnified when combined with the IC disclosures. It was also observed that IC and financial disclosure interacts on the effects of the cost of equity capital, the analysis of this interactions demonstrates that the effect of financial disclosure on the cost of equity capital is augmented for firm characterized by medium level of IC disclosure. Used stataIn their study, Francis, Nanda and Olsson, (2002) investigated the relation among voluntary disclosure, earning quality and cost of capital. The study was done in Chicago, USA on 677 firms’ annual reports and 10-K filings in the fiscal year 2001 using self constructed index of coded items. It was noted that firms with good earning quality have more expansive voluntary disclosure than firms with poor earning quality, on unconditional tests, it was found that more voluntary disclosure is associated with lost cost of capital, however on complementary association between disclosure and earning quality it was noted that the disclosure effect on the cost of capital is substantially reduced or disappear completely. Additionally, Cerf (1961) investigated the relationship between voluntary disclosure of information and the level of profitability, size of the firm and its shareholders in the US market. The methodology used was descriptive approach which focused on analyzing the association between voluntary disclosure of information and the level of profitability on annual reports of 25 different companies listed on the New York Stock Exchange, he found a positive relationship between voluntary disclosure of information and the level of profitability, size of the firm and its shareholders. 2.3.4 Board Size Information voluntary disclosure and Cost of Equity CapitalIn examining the effect of board independence and voluntary disclosure on the cost of equity capital, Setiany et al. (2007) showed that there is a significant relationship between voluntary disclosure and firm’s cost of equity capital. The study employed regression analysis on secondary data from companies listed in indonesian Stock Exchange during the period of 2009 to 2012 on a sample of 104 companies in the manufacturing sector. The study concluded that there is no relationship between board independence and cost of equity capital, however the results. However Khemakhem and Naciri (2015) examined the association between board and audit characteristics and the cost of equity capital in Canadian market. The methodology used descriptive statistics on a sample of 139 firm year observation from proxy circulars, proxy statements and annual reports of Canadian companies that were part of S/P TSX for the period 2004 to 2006. The study found that the size of audit committee and non-duality of the chairman of the board are positively related to the cost of equity capital, also the study revealed that the independence and board size do not affect the cost of capital for firms in the sample. Fauzi and Locke (2012) investigated the role of board structure and the effect of ownership structure on firm performance of New Zealand listed firms. The study employed balanced panel methodology on 79 New Zealand listed firms, it also employed Generalized Linear Model (GLM) to analysis data from annual reports of listed firms for the period of 2007 to 2011.the results of the study show that the board of directors, board committee and managerial ownership have a positive and significant impact on the firm performance. While Hasan et al. (2009) examined the impact of ownership structure and corporate governance on capital structure using a sample of 58 randomly selected non-financial listed companies from Karachi Stock Exchange for the period 2002 to 2005. Data was analyzed using multivariate regression analysis under fixed model approach. The results show that board size is significantly related to capital structure. However, non executive directors on board and CEO/Chair duality have no significant relationship with capital structure. Similarly, Jaradat (2015) investigate the effect of board size, board gender, outside director and CEO duality on the capital structure in Jordanian firms. Observation was done on 129 firms for the period 2009 to 2013. Multiple regression analysis was employed to test the association of secondary data collected from yearly annual reports. The results showed a positive association between board size, board diversity and outside directors and the capital structure, however for CEO duality and capital structure there was no significant relationship. 2.4 Conceptual framework This section will deal with operationalization of variables of the study, measures of voluntary disclosure and measure of the cost of equity capital. Independent variables Dependant Variables VariableIn this study the dependent variable is the cost of equity capital while the independent variables also referred as voluntary disclosure are the general corporate and strategic disclosure, forward-looking disclosure, social and board disclosure and financial disclosure (Barako, 2007) CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This chapter discusses the methods and procedures to employ to conduct the study. This chapter presents details of the research design, population, sampling and sampling procedures data collection methods, data analysis technique data and instruments for data analysis. 3.2 Research Design Research design is the framework the research intends to follow. It describes the nature and pattern the research intends to follow (Makerere University, 2011). Ogula (2005) describe a research design as a plan, structure and strategy of investigation to obtain answers to research questions and control variance. This study will adopt descriptive research design as it describe the characteristic and association voluntary disclosure and cost of equity capital of firms listed at NSE. Based on the secondary data to be obtained from annual reports and accounts of companies quoted in the NSE and company website. The choice of descriptive is motivated by the fact that it involves gathering data, observing and describing the behavior of the data without influencing it in any way (Bryman, 2001). This will be appropriate in the study since it will establish the effect of voluntary disclosure on the cost of equity capital. 3.3 Target Population Mugenda and Mugenda (2009) define a population as sum of all the items considered under a study. According to Ngechu (2004) a population is a well defined set of people, services, elements events or households that are being investigated. The target population for this study will consist of 64 firms listed in NSE (CMA, 2017), however consideration will only be on those which have been continuously trading since 2011 without being suspension or delisting 3.4 Sample Size and Sampling Procedure A sample is sub-group of the target population chosen by the researcher to represent other members of the target population (Amin, 2004). Sampling is the process, technique and procedure of choosing a sub-group from a population to participate in the study. Oso and Onen, 2009) stated that there are two main ways of selecting study sample from the target population, probability and non-probability sampling technique. The study will apply purposive sampling technique to select companies to be included in the study. Kothari (2004) stated that in purposive sampling technique an element is selected though subjectively defined method where the researcher personal judgments play an important role. An optimum sample is one which fulfils the requirements of efficiency, representativeness, reliability and flexibility. The study will comprise of a sample of 20 firms from NSE 20 share index selected based on a weighted market performance in the year 2017 (NSE, 2017). 3.5 Instrumentation and Data Collection Creswell (2008) argues prior to research, a researcher ought to develop a data collection instruments which is meant to measure, observe data under investigation. The study will use Disclosure Check Index (DCI) as the principal instrument for data collection of voluntary disclosure information. According to Mugenda and Mugenda (2009), How to cite Multiple Regression Analysis, Papers

Finance For Business Investment Or Initial Outflow Free Sample

Question: Define about the Finance for Business for Investment or Initial Outflow. Answer: Part A Pay Back Period Payback period is used to analyze that how much time is required to recover the initial cost of investment or initial outflow. If payback period is shorter, the project is more desirable (Chandra, 2015). Whether in discounted payback period, the concept of time value of money is applicable. Pay Back period = Initial Investment / Cash flow of per period If cash flow of every year is same, then above formula will apply. For example, asset purchase costing $100000 and cash flow every year is $25000, then pay back period will be 4 years ($100000 / $25000). And if cash flow is different in every year, then discounted payback period calculated. In the given project required rate of return is 12% and cash flow is different every year, so discounted payback period will be calculated. Calculation of depreciation: Depreciation = (cost - salvage value) / life of asset = (34500000 - 5500000) / 5 = 5800000 Expenditures for adding new features and expenditures for market study both considered as initial cash outflow. Payback period of the project is 2.79 years means cost of assets can be recovered in 2.79 years. It is beneficial for the Emu electronics to investment in manufacturing equipments. Profitability Index (PI) Profitability index used to identify the relations between cost and benefits by calculated ratio. It is used for ranking projects. While calculating profitability index, time value of money is also applicable. It is a tool of finance to taking decision, whether the project will be accepted or not (Damodaran, 2010). The project will be accepted if profitability index will more than 1 (1) and the project will be rejected if profitability index falls below 1 (1). And if, profitability index is equal to 1 (=1), then it will be situation of indifferent means projected will be accepted or rejected. Profitability Index = Present Value of Inflow / Present Value of Outflow = 52205510.12 / 35,450,000 = 1.47 As per above calculation profitability index is more than 1, so the project is acceptable. Emu electronics should have accepted the project. Internal Rate of Return (IRR) It is the rate of return which is used to calculate profitability of investment. IRR is the rate of interest. The net present value should be equals to zero of all cash flows at internal rate of return (Gallagher Andrew, 2007). Calculation of Internal Rate of Return by Trial Error method: IRR = 30 + (35570884.83 - $35,450,000) / (35570884.83 - 34908659.88) = 30.18254345 Internal Rate of Return of the project is 30.18% on which net present value will be zero. Net Present Value (NPV) It refers to divergence between present value of cash inflows and present value of cash outflows. The criteria of acceptance the project is net present value (NPV) will be positive and the criteria of rejection of project is net present value (NPV) will be negative. And if, net present value (NPV) is zero, it will be condition of indifference. Formula: Net Present Value = Present Value of cash Inflows Present Value of cash Outflows Calculation of Net Present Value: While calculating present value of inflows, present value of residual value/salvage (i.e. 5500000) also included (Needles, Powers Crosson, 2010). Here, net present value of project is $16,755,510 which is positive so, project will be accepted. Sensitivity of NPV to changes in the price of the new smart phone Changes in cash flow directly impacts to NPV and cash flow changes if there is variation in price of product. Net present value changes with change in the price of the product. If price of the smart phones will be increases then net present value will increases and remains positive. And if, price of the smart phones will be decreases then net present value will decreases or falls negative. So, it can be said that net present value is highly sensitive with changes in the price of the new smart phone (Moyer, McGuigan Rao, 2014). Sensitivity of NPV to changes in the quantity sold If selling quantity of any product changes, it directly impacts to net present value. If selling quantity of smart phones will be increases, net present value will increases. And if, selling quantity of smart phones will be decreases, net present value decreases. So it can be said that sensitivity of net present value (NPV) is depends on change in number of units sold or quantity sold. Net present value is more sensitive with changes in the quantity sold (Gill, 2015). Emu Electronics should produce the new smart phone Emu Electronics should have to produce the new smart phone because it is profitable as per calculations made under net present value, payback period and profitability index. The payback period of Emu Electronics is 2.79 years. If Emu Electronics invested in manufacturing equipments of new smart phone then they can recover their investment cost in the period of 2.79 years. Profitability index of Emu Electronics is 1.47 which is more than 1, so new project is suitable for them. Net present value of Emu Electronics is positive, so new project is acceptable. If Emu Electronics loses sales on other models because of the introduction of the new model If Emu Electronics introduce new model of smart phone, it will be carried more specifications. So customers will prefer to buy it. Hence, automatically sales of other models will be decreased. It impacts the profitability and net present value of company. As per market general scenario, if any new product launched in market then it will be successful or not depends on its specifications or customers need. If such product is more useful or have special characteristics then customers will prefer to buy it because they got more satisfaction. If there is no specifications in new product then customers will not buy it. Introduction of new product always effects to the sale of other products. Same with Emu Electronics, they got loss of sales on other models because of introduction of the new model. It happens because customers divert to purchase new model and sales decreases of other models. Due to change in sale, cash flow of company changes and it effects directly to net present value, profitability index and payback period. So it affects on complete analysis of company. Part B Cost of capital for Hubbard computer ltd 1) From the ASX website annual report of Harvey Norman of 2015 downloaded. The annual report of any company shows the complete outlay of that company. As per balance sheet or statement of financial position as at 30 June 2015, on page number 59 book value of debt and book value of equity found. Book value of debt included notes payable, current portion of long term debt and long term debt. As per annual report of Harvey Norman, the book value of debt is $698,438,000 as at 30 June 2015 is: Current portion of Interest bearing loans and borrowings $408,438,000 Non-current portion of Interest bearing loans and borrowings $290,000,000 Book Value of Debt $698,438,000 Book value of equity includes share capital or contributed equity, reserves surplus and retained profits. As per annual report of Harvey Norman, the book value of equity is $2,556,860 as at 30 June 2015 is: Contributed equity $380,328 Reserves $113,290 Retained profits $ 2,043,463 Non-controlling interest $19,779 Book Value of Equity $2,556,860 (Source: Annual report of Harvey Norman, 2015) As per title Interest Rate Risk Management in annual report of Harvey Norman at page number 120, breakdown of Harvey Normans long-term debt is as follows: (Source: Annual report of Harvey Norman, 2015) Average interest rate (floating) of long-term debt is 0.47% to 5.93% provided in annual report of Harvey Norman. There is no other categorization of debts as per group of years. 2) Most recent stock price listed for Harvey Norman 5.18 Market value of equity, or market capitalization 5.76B Outstanding shares of Harvey Norman 2,066,523 Most recent annual dividend (pay date 01 Dec 2015) 11 cent As per annual report dividend per share 20.0 cent As per annual report special dividend per share 14.0 cent Dividend discount model can use in this case as all relevant information are available. Beta for Harvey Norman 0.70 Note: All the amounts given above are in Australian Dollar (AUD). (Source: aufinance.yahoo.com, 2016) Yield on government debt is 1.86% as per Bonds link at aufinance.yahoo.com. Cost of equity for Harvey Norman by Capital Asset Pricing Model (CAPM): Cost of equity = Risk free rate of return + Premium expected for risk Cost of equity = Risk free rate of return + Beta * (market rate of return risk free rate of return) = 1.86% + 0.70 * (3% - 1.86%) = 0.02658 = 2.658% Here, government bonds yield value taken as risk free rate of return. Cost of equity is interest rate of equity capital (Pratt Grabowski, 2010). Under capital asset pricing model, risk factor of capital invested is considered. Risk free rate of return is a rate of government bonds, which are free from market risk. Value of beta is taken from Harvey Normans site. And market rate of return is calculated, it is shown in appendix. 3) Business loan rate is 5.34% p.a. as per provided site of Westpac. Weighted average cost of debt for Harvey Norman By book value weights: Weighted average cost of debt = total of weighted rate / total of weight = 3.738 / 1 = 3.738% Here one type of debt (i.e. interest bearing loans and borrowings) available as per annual report of Harvey Norman. Cost of debt is 3.73% for both, current and non- current interest bearing loans and borrowings. So there is no dissimilarity between cost of debt and weighted average cost of debt. It can be understand by above calculation of weighted average cost of capital. Weighted average cost of debt cannot be determined by market value basis because loans and borrowings do not have market value. The market value and book value are same in case of loans and borrowings. So, cost of debt by market value weights will be same as cost of debt by book value. Cost of debt = borrowing rate * (1-tax rate) = 5.34 * (1-.30) = 5.34 * .70 = 3.738 % Cost of debt is a rate of interest, by which rate, company paid interest to money lenders. The cost of debt of Harvey Norman is 3.738%. Company will pay interest on loans and borrowings at 3.738%. Cost of debt calculated by making interest rate after tax because company got tax benefit on debts. (Source: Westpac.com, 2016) 4) Weighted average cost of capital of Harvey Norman: In weighted average cost of capital, weight provides to amount. Then multiply cost and weight to find weighted cost / rate. Under weighted average cost of capital, equity share capital, preference share capital, debentures and long term loans are included. While calculating weighted average cost of capital by book value weights, book value take given under financial statement. By book value weights Weighted average cost of capital (WACC) = total of weighted rate / total of weight * 100 = (0.0373 / 1) *100 = 3.73% By market value weights Weighted average cost of capital (WACC) = total of weighted rate / total of weight * 100 = (0.0278 / 1) *100 = 2.78% Market value of equity is taken 5.76B as per point 2. Relevancy of weighted average cost of capital liable with market value weights. Lower the cost of capital, it will be less risky for company. So 2.78% is less, hence it is more relevant for Harvey Norman. 5) Harvey Norman is a representative company of HCL to estimate the cost of capital. If both companies have same nature of work and same debt equity structure, then there will no problem in calculating cost of capital. But if, debt equity structure and nature of work is different then it will be potential problem with this approach. In that situation, cost of capital will be different and Harvey Norman will not be considered as representative company of HCL to estimate the cost of capital. Refrences Chandra, P. 2015. Financial Management: Theory and Practice. McGraw-Hill Education Needles, B. E., Powers, M. Crosson, S. V. 2010. Principles of Accounting. (Ed. 11). Cengage Learning Damodaran, A. 2010. Applied Corporate Finance. (Ed. 3). John Wiley Sons Gallagher, T. J. Andrew, J. D. 2007. Financial Management; Principles and Practice. (Ed. 4). Freeload Press, Inc. Moyer, R. C., McGuigan, J. R. Rao, R. P. 2014. Contemporary Financial Management. (e.d. 13): Cengage Learning Gill, S. 2015. Cost and Management Accounting: Fundamentals and its Applications. (e.d. 1): Vikas Publishing House Australia Government Bond 10Y. 2016. https://www.tradingeconomics.com/australia/government-bond-yield Intelligent Investor. Dividends. https://www.intelligentinvestor.com.au/company/harvey-norman-11766/dividends Pratt, S. P. Grabowski, R. J. 2010. Cost of Capital in Litigation: Applications and Examples. (e.d. 4). Volume (647 of Wiley Finance): John Wiley Sons Westpac. 2016. Business loans interest rates. Retrieved on 19 Aug 2016 from: https://www.westpac.com.au/business-banking/business-loans/business-loans-interest-rate/