The Profile Of Laura Ashley Plc - 1166 Words

Financial Report: Laura Ashley Plc ID NUMBER: FNN 5200 Corporate Finance Dr. Jessica Wang Word Count: 2427 Richmond the American International University in London 1: The Profile of Laura Ashley Plc Laura is a Welsh textile company which held by the MUI Group in Malaysia. The company was founded by an engineer, Bernard Ashley and his wife, Laura Ashley in 1953. Past 20 years times, the company was growing on an international level. The sales in 2000 went up to  £276 million. The products is considered as essentially British. The main shareholders of the company are Malayan United Industries Bhd with 255,938,185 shares, Kay Peng Khoo PhD with 187,845,822 shares, AEON Co. Ltd with 35,220,606 shares and Ruffer LLP with†¦show more content†¦The debt to equity ratio is 2, the beta is 0.2 according to the FT (2015) which means its shares are 80% less risky in comparison to the entire market and the dividend payout ratio (DPS/EPS) for the company is 1.15 2: Laura Ashley Tied with the Trade-Off Theory and Risk Dimension It is important to explain the trade-off theory before applying the theory. This theory relates to the idea that a company selects how much debt and equity it should take on and this is by comparing the costs as well and the benefits. For example there are dead weight costs of being bankrupt by taking debt and there are tax saving benefits of taking debt. Thus, this trade off theory involves analysing the outcomes of taking equity or debt being a negative or a positive. The company is mainly aligned with trade off theory and not pecking order theory because Laura Ashley prefers using equity over debt. This is because the advantages of using equity over debt relates to being less risky than a loan as it does not have to be paid back, more cash at hand to expand business operations and the investors have a long term view of receiving