"Any party that can guarantee financial responsibility and efficiency can have my vote."
the fact that the libs understand how capital works must be a plus for them
apparently swann thinks the bond rate is the same as the cost of capital...lol v v v read this article
IT can't really be that the federal Treasurer does not understand the fundamentals of capital management that drive large-scale commercial investment. But that is one of the damning possibilities raised in an incendiary note from a senior Macquarie Private Wealth investment adviser.
The note, which was sent out late last week but is still finding its way around the boardrooms of global mining, claims that in a discussion with Macquarie analysts, Wayne Swan "apparently did not understand" a question that focused on the difference between the government bond rate and a company's average weighted cost of capital.
"Apparently Wayne Swan thought that the long-term bond rate was a companies (sic) cost of capital," the adviser reported.
The note reported that "a few Macquarie analysts attended a breakfast meeting with Wayne Swan" and one asked why the 40 per cent RSPT kicked in at the long-term bond rate rather than something closer the miner's average weighted cost of capital, which would historically be nearer 10 per cent.
Start of sidebar. Skip to end of sidebar. Related CoverageRudd can't afford to ignore miners The Australian, 1 day ago Kevin fails to move mining bosses The Australian, 1 day ago Restart tax plan: PM's adviser Perth Now, 2 days ago PM to meet with mining bosses Perth Now, 3 days ago Fears grow of Labor election loss The Australian, 8 days ago .End of sidebar. Return to start of sidebar. "Anyone who has studied finance knows that a company will not invest in a new project unless that project will generate a return on investment above the companies cost of capital," the adviser wrote.
"Apparently Wayne Swan did not understand the question. Apparently Wayne Swan thought the long-term bond rate was a companies cost of capital." http://www.theaustralian.com.au/business/opinion/swan-doesnt-appreciate-the-impact-of-tax/story-e6frg9lx-1225866331341
