(a) Consider each of the following companies. In each case suggest a fixed income security the company could issue to raise funds. Explain any specific features that make the security appropriate for the issuer and attractive to investors. (80 marks)

(i) Company A is a mature utility provider that wants capital to implement its 10-year plan to upgrade its infrastructure.

(ii) Company B has developed an exciting new social media platform. While already publicly traded, the company has limited revenues but expects to be profitable in 3 years.

(iii) Company C offers property insurance and is financially secure but faces potentially huge liabilities in the event of a natural disaster such as an earthquake or a flood.

(iv) Company D is a large credit-worthy financial institution. Much of its income is linked to variable-rate loans. While funds are to be secured for 10 years, the company hopes it will be able to repay the debt early.

(b) Suggest changes that could be made to a bond contract, without altering the promised cash flows, which could reduce the cost of capital. (20 marks)