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Introduction
The portrait of the two famous Australian companies have outlined in this paper considering the importance of their WACC (Weighted Average Cost of Capital) and financial risk management strategies for both of their managers. Before going to the theoretical discussion and WACC calculation, it is important to take a precise look of the companies profile over the last fiscal year, 2008.
BHP Billiton
BHP Billiton is dual listed in ASE 1 and LSE2, and FTSE 100 Indexed mining company headquartered in London and having operations all over the globe as a major player in the mining industry. The annual report 2008 of BHP Billiton reported that, due to the merger between Australias large company BHP3 and the British company Billiton, it is the worlds largest mining company from 2001.
While considering the growth at first, they rely on fuel and the involving resources oil, gas, coal, iron ore, manganese, alumina, nickel, copper, and uranium. Besides, they also significantly pay attention on the developing Asian countries for both production and supply of the world market.
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Company objective: the discovering of the long run prime company objective has involved in following the phases
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Development
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Natural resources renovation
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Proof innovation provisions to attract customer
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Resolution considering market focus
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Production outcomes: Have a large product line that includes- diamond, as well as gold, silver, lead, zinc, both metallurgical and thermal coal for energy supply, iron ore, oil, gas, manganese, both alumina and aluminum, nickel and uranium.
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Number of employees: More than 41,000
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Number of contractors: More than 61,000
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Operating areas: Over 25 different countries including 100 operating areas
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Headquarter: Melbourne, Australia
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Company type: During 2001, through a merger, the BHP Billiton Plc has outlined as Duel Listed Company (DLC) combining the BHP Billiton Limited Group and the BHP Billiton Plc Group. The separate corporate survival and the stock exchange listing of both the companies stayed under same economic umbrella as well as unique executive management structure.
Telstra Corporation Ltd
It is a renowned Australian company operating in the telecommunication field. In the fiscal year 2008, the company has achieved a significant earning growth with their additional improvement within subscriber acquisition and re-contracts costs4 management. Moreover, in both market and consumer segmentation, they have a conscious attention. Following are the phases of their recent business atmosphere during 2008. Product and services available at the Telstra- post paid phone services affiliated with 3GSM network; phone services for the residential consumer include the fixed and wireless broadband, and the G network; the mobile data transferring advantages
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