DEVCON INDUSTRIES LIMITED
Income Statement
For the year ending Dec. 31, 2018 and 2019
					2018		2019
					$000's		$000's
Sales					900000		1125000
Cost of Goods Sold					300000		306600
Gross Profit					600000		818400
Selling and Administrative Expenses					150000		156000
Depreciation Expense					54000		57000
Advertising Expenses					18000		21000
Earning Before Interest and Taxes					378000		584400
Interest Expense					3000		3000
Taxable Income					375000		581400
Taxation (35%)					131250		203490
Net Income					243750		377910
Dividends (40%)					97500		151164
Addition to Retained Earnings					146250		226746
Additional Information
Share Price					21		27.3
Ordinary Shares Outstanding					120000000		144000000

DEVCON INDUSTRIES LIMITED
Statement of Financial Position
As at Dec. 31, 2018 and 2019
ASSETS			2018	2019	LIABILITIES & EQUITY			2018	2019
Current Assets			$000's	$000's	Current Liabilities			$000's	$000's
Inventories			264000	276000	Accounts Payables			138000	114000
Accounts Receivables			294000	330000	Notes Payables			150900	132654
Cash and Equivalents			210900	270000				288900	246654
			768900	876000	Non-current Liabilities			120000	90000
					Total Liabilities			408900	336654
Net Fixed Assets			630600	690000	Equity
					Common Stock			264000	276000
					Retained Earnings			726600	953346
					Total Equity			990600	1566000
Total Assets			1399500	1566000	Total Liabilities & Equity			1399500	1566000

Question 3

1. DEVCON Industries is considering issuing a $20,000,000 15-year bond in early 2022, with an annual coupon rate of 4%, and semiannual interest payments.

Required:

If the company anticipates that the yield to maturity on the date of issue is expected to be 4.5%, given the companys credit ratings and current market conditions, how much would an investor be willing to pay for $1,000 face value of this bond?