Question 1 Ali Hasan Company is a large manufacturing firm in Bahrain that was created 20 years ago by the Hasan family. It was initially financed with an equity investment by the Hasan family and 10 other individuals. Over time, Ali Hasan company has obtained substantial loans from finance companies and commercial banks. The interest rate on loans is tied to the market interest rates and adjusted every six months. Thus, Ali Hasan cost of obtaining funds is sensitive to the interest rate movements. It has a credit line with a bank in case it suddenly needs to obtain funds for a temporary period. It has purchased treasury bill (government securities) from Central Bank of Bahrain (CBB) that it could sell if it experiences liquidity problems. Ali Hasan Company has assets valued at $50 million and generates sales of about $100 million per year. Some of its growth is attributed to its acquisitions of other firms. Because of its expectations of a strong Bahrain economy, Ali Hasan plans to grow in the future by expanding its business and through acquisitions. It expects that it will need substantial long-term financing and plans to borrow additional funds either through loans or issuing bond. It also considering the issuance of stock to raise funds in the next year. Ali Hasan closely monitors conditions in financial markets that could affect its cash inflows and cash outflows and therefore affect its value. Answer the following questions: a In what way is Ali Hasan company a surplus unit? (1 mark) b. In what way is Ali Hasan company a deficit unit? (1 mark) c. How might commercial banks facilitate Ali Hasan expansion? (1 mark) d. How might investment banks facilitate Ali Hasan expansion? (1 mark) e. How might Ali Hasan use the primary market to facilitate company expansion? (2 marks) 4. How might Ali Hasan use the secondary market to facilitate company expansion? (2 marks)