Case Study Cost of Capital

In: Business and Management

Submitted By hafizah
Words 1564
Pages 7
Case 8
Cost of Capital
Nur Aishah Abdul Aziz and Supornthip Nutim @ Salmah Abdullah
SYNOPSIS
This case is about Maju Group Berhad (Inter-Pacific Industrial Group Berhad) which is also the owner of Maju Coffee Valley Company Sdn Bhd. The company plans to expand its retail outlet from 80 in 2011 to 88 outlets in the year 2013. According to the company’s year plan, Coffee Valley plans to open two outlets in Perak as a new potential area for the business expansion. To achieve this goal, the company needs to raise their cost of capital via long term investment to ensure their company has sufficient capital to set up the new upcoming outlets next year.
INTRODUCTION
Maju Coffee Valley Company Sdn Bhd recorded 30 percent increase in revenue generally attributed to the company’s aggressive marketing and expansion program as well as introduction of new and innovative products. Therefore the company wants to look into the area that might give them opportunity to expand their business. In order to expand its retail outlet, the top management held meetings to discuss important things that needed to be considered in making a decision. In the meeting, they selected the new rapid development area located in Manjung and Taiping, Perak for the next upcoming outlets to be opened this year.

COMPANY BACKGROUND Coffee Valley has a simple and clear mission statement which is to establish Coffee Valley as the best coffees for drinking all the time. The following four Guiding Principles will help us evaluate the appropriateness of our decisions: 1. Offer a great work environment and treat each other with respect and dignity. 2. Embrace variety as a crucial component in the way we do business. 3. Apply the premier standards of superiority to the purchasing, roasting and fresh delivery of our coffee. 4. Develop passionately satisfied customers all of the time.…...

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