BUS5IAF Introduction to Accounting and Finance

Medigard is an innovative international company that specializes in retractable safety medical devices for the global market. Established as Medisafe Instruments Pty Ltd in 1999, Medigard focused on leading the way in safety equipment. As a result of extensive research and development, Medigard brought innovative, world-leading medical devices to the market.

In 2004, the Company listed on the ASX in 2004 as Medigard Limited (MGZ), raising $3.4 million capital. As an R&D company, Medigard sought to design and develop a suite of safety medical devices and associated products, instrumental in the medical industry for transforming the safety of disposable medical devices and associated equipment. Medigard products are simple in designs with minimal parts that enable inexpensive production.

1. Being a part of the treasury team of Medigard, your first exercise is to categorise Medigard’s capital structure into debt and equity capital. Begin by visiting the company’s website for 2016 financial report. http://www.medigard.com.au/investor-centre
2. Calculate after-tax Weighted Average Cost of Capital. 
3. What alternative capital structure would you recommend to lower the cost of capital for the company.