After graduating, you have been employed by a company called PlastiTubes Ltd., as a project finance manager. PlastiTubes is a variety of Fibre Reinforced Polymer (FRP) pipes and containers used for transporting and storing corrosive liquids. PlastiTubes supplies customers involved in the petrochemical and wastewater (sewage) treatment industries. Their main product, FRP pipe, has an exceptional strength to weight ratio, and weight for weight is stronger than steel. The pipes also have good shock and impact resistance and excellent flow characteristics as a smooth glass-like interior finish reduces material build-up and improves fluid transmission. PlastiTubes is a medium sized company listed on the NZX and has 20 million shares on issue the current share price is $2.40. In addition, PlastiTubes issued 5 million preference shares three years ago. These preference shares have a $1 face value and a fixed dividend of 12% p.a. The preference shares are currently trading at $1.50 each. The company's equity beta (B) is 1.20, the New Zealand market risk premium is estimated at 6.0% p.a., the yield on 10-year New Zealand government bonds is 2.50% p.a., and the company tax rate is 28%. The company's long-term debt consists entirely of 15,000 10-year bonds issued exactly five years ago (these are listed on NZDX). Each bond has a face value of $1,000 and an annual coupon rate of 8.5% (paid semi-annually). The bonds are currently trading at a yield to maturity of 5.23% p.a. Extracts from PlastiTubes' latest financial statements show the following: Balance Sheet of PlastiTubes as at 31 September 2020 (5000) Current Assets Non-Current Assets 4,000 Current Liabilities 2,000 47,000 Non-current Liabilities 15,000 Preference Shares 5,000 Ordinary Shares 20,000 Retained Earnings 9,000 Total Assets 51,000 Total L & OE 51,000 You have just received the following memo from the company's Chief Executive Officer George Lazyboy and have decided you need to prepare thoroughly for any questions that might arise from your colleagues. On first glance you are a little concerned with some of the calculations and feel you might have to talk briefly with Mr Lazyboy before the meeting as well.