ANSWER ALL QUESTION.
- BONDS
Bond with a par value of RM1000 were issued by KEE company and have another 15 years before reaching the maturity period. The coupon rate promised is 5% per year, paid twice a year. The market interest rate of bonds with similar risk level with this company’s bond is 6%.
What is the present market value of this bond?
- ORDINARY SHARES
Ordinary shares of Mesra Company had just been sold at the price of RM2.30 per share. The company expects to experience a constant growth rate of 10.5% and the dividend at the end of the year is expected to be RM0.25.
What is the expected rate of return for the shares of Mesra Company?
- PREFERENCE SHARES
If Cabin Company pays dividends as much as RM1 per year for its preference shares and the required rate of return is 12%, what is the value of these preference shares?
- WACC
The information below is the total financing for each capital resource of Jati Company.
| CAPITAL RESOURCES | TOTAL FINANCING (RM) |
| Long Term Debt | 40,000 |
| Preference Shares | 20,000 |
| Ordinary Shares | 40,000 |
The cost of debt before tax is 9.37% T
The cost of preference shares is 10%
The cost of ordinary shares is 13%
Marginal tax is 34%
What is the Weighted average cost of capital (WACC) for the company?
Need help with this assignment or a similar one? Place your order and leave the rest to our experts!