Azzumah,Goodluck to you and everyone else on this board who...

Azzumah,

Goodluck to you and everyone else on this board who think they will see a cap raising at $12.

To appreciate that a capital raising when equity is expensive will be resisted by management you must understand that ROE and ROC are 2 of the key measures of their performance. This is highlighted in the interview between Richard Goyder and messers Kohler and Bartholomeusz.

"SB: Richard, if you go back to the balance sheet issues just for the moment, you did raise, as Alan said, $2.5 billion plus last year out of ordinary equity. Wesfarmers has recently been really proud of its return on capital. If you were to raise equity again, presumably that means that the return on capital’s no longer a priority?

Goyder: No. That definitely doesn’t mean that, Stephen, but that’s one of the dilemmas, if you like, in all of this. We look at return on equity and return on capital as really critical to us and they continue to be key measures in the group of divisional operating performance and indeed of executive incentives and the like and that’s one of the things we need to consider. While some people would like us to emphatically deal with what they see as balance sheet issues, we want to do it in a way that preserves our capacity to grow return on equity over time. So, that’s one of the things we’re looking at. We’re not going to be panicked into doing anything."

and

"AK: Do you have any problem with going back to the people who provided the equity last year, a year ago or in last April at $29 because there’s been talk of the next raising at being something in the order of $12? I mean how do you feel about that?

Goyder: Well, any talk of us going to the market sounding things out at $12 late last year is completely erroneous. It’s just completely untrue."

http://www.businessspectator.com.au/bs.nsf/Article/KGB-INTERROGATION-Richard-Goyder-$pd20090115-NB6H7?OpenDocument&src=sph