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a ) Drex Ltd has a $ 1 0 0 face value bond with a 4 . 5 % coupon rate. The bond matures in

a) Drex Ltd has a $100 face value bond with a 4.5% coupon rate.
The bond matures in 25 years, and coupons are paid annually. The
required rate of return is 6%.
(i) Calculate the value of the bond.
(ii) Is the bond priced at a discount, par or premium?
Explain.
(iii) List three features that Drex Ltd could attach to this bond issue.
c) CuJi Inc just paid a $2.50(D0) annual dividend per share. Investors believe
that the dividend is expected to grow at a rate (g) of 2% per annum for the
foreseeable future. Assume investors require a rate of return of 5%.
(i) Calculate the current price of the stock.
(ii) If the stock currently trades at $86, would you buy it?
c) TESB Corporation has the following capital structure.
Giving your answers in percentages to 2 decimal places, calculate the
(i) Cost of debt.
(ii) Cost of preferred stock.
(iii) Cost of common stock.
(iv) Weighted average cost of capital, using the following capital
structure.
P-Generator is a manufacturer of industrial portable power generators. The
finance manager is concerned about the firm's management of working capital.
a) The average collection period and average payment period are 28 days and
32 days respectively. The firm turns over its inventory 10 times each year
(assume 365 days year), and currently has annual sales of $30 million.
(i) Calculate the firm's operating cycle and cash conversion cycle,
correct to 1 decimal place.
(ii) Determine the amount of resources needed to support the firm's cash
conversion cycle.
b) P-Generator purchases 80000 units per year of a component used in power
generators production. The cost per order is $40, while the carry cost is $8
per unit per year.
(i) Calculate the economic order quantity.
(ii) Using your answer in (i), calculate the ordering cost, carrying cost
and total inventory cost.
c) Suppose P-Generator operates a 250 days per year, and maintains a
minimum inventory level of 150 units of safety stock. If the lead time to
receive orders of the component is 5 days, calculate the reorder point.a) Describe the FIVE steps in planning personal financial affairs.
b) "Apart from your own actions, the outcome of your financial plans also depended on external factors". List THREE of such external factors.
c) The following is an extract of Danny Ong's personal balance sheet.
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