BRIAN KANTOR: How more equity and less debt affect a growth company
The case of Mpact demonstrates how best to fund growth
05 May 2023 - 05:00
SA paper and packaging company Mpact recently reported highly satisfactory results, a rarity for an SA industrial company. It appears to have good growth prospects linked to SA’s favourable agricultural export outlook.
And Mpact seems willing to invest in the growth opportunity and raise capital from internal and external sources to fund it. It speaks of a 20% internal rate of return on these projects, well above the 15% per annum that could be regarded as the opportunity cost of the capital it raises. ..
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