Question
(a) Farah is in her early 60s and planning to retire within the next couple of years. Aside from her savings in her CPF account
(a) Farah is in her early 60s and planning to retire within the next couple of years. Aside from her savings in her CPF account and a HDB flat, she does not have any other valuable assets. She expects to have a modest retirement lifestyle and will likely live past eighty years old. The following are some financial products available for investment: The Straits Times Index (STI) Early start-up business Corporate bond with AAA rating Ether (cryptocurrency) Discuss which financial products Farah should and should not invest for her retirement. (16 marks)
(b) Examine the impact on a firms weighted average cost of capital (WACC) if beta increases and there is decline in financial leverage. (6 marks)
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