BUSINESS FINANCE

FINAL PROJECT REPORT

Group Members:

1) Haniya Makhdoom (70077801)

2) Arslan Raheem (70078688)
3) Hina Rasool (70078683)
4) Umaira Ramzan (70077748)
5) Malika Namal (70077505)

Sector:

Cable and Electrical Goods

Company:

Pak Elektron Ltd.

THE UNIVERSITY OF LAHORE

BBA 2Years
Table of Contents:

 Sector Overview
 Cable and Electrical Goods
 Company Profile and Overview
 Pak Elektron Ltd.
 Cost of Capital, Cost of Debt, Cost of Equity
 Equity
o What is equity
o Formula
 Debt
o What is Debt
o Formula
 Capital
o What is Capital

 Calculation of Cost of Equity

 Calculation of Cost of Debt
 Weighted Average Cost of Capital
o What is Weighted Average Cost of Capital

 Calculation of Weighted average Cost of Capital

 Stock Prices Trend
 What is Stock Price Trend
 Graph
 Description about graph
 Conclusion
 Link
  Sector Overview:

Amidst a progressing vitality emergency, that has been possibly devastating

the assembling areas of the nation over the previous decade or somewhere in the vicinity, the
link and electrical merchandise industry has encountered a violent and exceptionally
whimsical example of development (assuming any). In spite of the way that there is no lack
of Cable and Electrical Goods makers in the market, including some industry mammoths, for
example, Pakistan Cables and Newage Cables, the common vitality emergency followed by a
disrupting and turbulent political field don't really make a situation helpful for development
and improvement, prompting a level of market wastefulness.

 Company Profile and Overview:

Pak Elektron Limited is occupied with assembling and offer of electrical

capital products and household apparatuses. The Company works through two portions:
Power Division and Appliances Division.

The Power Division is occupied with assembling and appropriation of

transformers, switchgears, vitality meters, power transformers, development of matrix
stations and zap works.

The Appliances Division is occupied with assembling, amassing and

dissemination of fridges, profound coolers, forced air systems, microwaves, clothes washers
and other home machines. It offers administrations to control utilities, enterprises, singular
clients, lodging and business ventures. Its building, obtainment and development (EPC)
contracting division conveys hand crafted and fabricated high voltage and additional high
voltage network stations, charge of lodging ventures and modern parks. The Company's
auxiliary is PEL Marketing (Private) Limited.

Type Public
Traded as PSX: PAEL
Industry Electronics
Founded !956
Headquaters Lahore, Pakistan
Area Served Pakistan
Key People Naseem Saigol (Chairman)
Murad Saigol (CEO)
 Muhammad Umer Faroq
(Company Secretary)
Prodoucts Refrigerators, Air
Conditioners, Microwave
ovens, Water dispensers,
Transformers, Switchgear
and Energy meters
Revenue US$ 279.97 million (2015)
Parent Saigol Group
Website www.pel.com.pk
Auditor Rahma Sarfarz Rahim
Iqbal Rafiq(Chartared
Accountant)
Registrar Corplink (private) Limited,
Wings Arcade, 1-K
Commercial Model Town,
Lahore
Address 17-Aziz Avenue, Canal
Bank, Gulberg V, Lahore
Fiscal Year End December

 Cost of Capital, Cost of Debt, Cost of Equity:

 Equity:
o What is Equity:

Equity is referred to as shareholder equity or owners’ equity, which represents the

amount of money that would be returned to a company’s shareholders if all of the assets were
liquidated and all of the company's debt was paid off. Equity is found on an organization's
accounting report and is one of the most well-known money related measurements utilized by
experts to survey the budgetary wellbeing of an organization. Investor value can likewise
speak to the book estimation of an organization.

o Formula:

Shareholders’ Equity = Total Assets − Total Liabilities

 Assets = Liabilities + Shareholder Equity

 Debt:

o What is debt:

Debt is the opposite of equity, which includes issuing stock to raise

money. Debt is when a firm sells fixed income products, such as bonds, bills, or notes.
It must be paid back.

o Formula for the cost of debt:

KD = Interest Expense x (1 - Tax Rate)

where KD = cost of debt

 Capital:

o What is Capital:

Financial capital is the money, credit, and other forms of funding that build
wealth. Businesses use capital to increase revenue. Debt and equity are types of capital.

 Calculation of Cost of Equity

(PEL):
Covariance 0.001862051
Beta 0.918652175

Rs Rf+B(Rm-Rf)
-0.704%

 Calculation of Cost of Debt (PEL):

2,4
Total Interest
80,088
Total Borrowing 15,6
 03,987
Before tax cost of debt 16%
Tax Rate 0.009%
After tax cost of debt 15.89%

 Weight Average Cost of Capital:

o What is Weighted Average Cost of Capital:

The rate that a company is expected to pay on average to all its security holders to finance its
assets is called the weighted average cost of capital (WACC). The WACC is referred to as
the firm's cost of capital.

 Calculation of weighted average cost of capital:

Sourc
Value Weight Cost WAAC
e
11,805,0 0. (0
Equity -0.704%
05 43 .0030)
15,603,9 0.
Debt 15.89%
87 57 0.0905
27,408,9 1. 15.189
Total
92 00 % 0.0874
or 8.74%
 Stock Prices Trends:
 What is Stock Prices Trend;

Trendlines, otherwise called jumping lines, will be lines drawn on a stock outline that
interface at least two value focuses. Since stock costs will in general pattern, trendlines that
interface the highs or lows in the stock's value history can help distinguish the present pattern
and anticipate what the stock cost may do later on.

 Graphical presentation:
0.4

0.3

0.2

0.1

0
1 2 3 4 5 6

 Description about Graph:

Prices of share changes every month. We take data of 12 months share
prices.The return is negative because the price of share and the overall market
(KSE100 index) is down.
 Conclusion:
This report is based on official data which is given on Pak Elektron Ltd and
PSX website.We use data from January 2019 to December 2019. The method
we have asked to use (CAPM) , in it the cost is negative because this method
only calculate return on the basis of price of share.
 Links:
https://www.psx.com.pk/

https://en.wikipedia.org/wiki/PEL_(company)

https://www.marketscreener.com/PAK-ELEKTRON-LIMITED-10130405/company/
https://dps.psx.com.pk/company/PAEL
https://www.linkedin.com/company/pak-elektron-limited

http://www.scstrade.com/stockscreening/SS_CompanySnapShot.aspx?symbol=PAEL