QUESTION 4 2. (a) Five years ago Gasoo Ltd issued 12% irredeemable debenture at their par value of GH 100. The current market price of these bonds is GH94. The company pays corporation tax at a rate of 30%. Calculate the company's current cost of debenture. 3marks (b) The Treasury bill rate is 24% p.a. and the expected rate of returns on the equity of your firm is 3% p.a. If the expected return on the market portfolio is 30%, what is the beta of your company? 3marks The government of Ghana is about to issue an irredeemable bond with a face value of GH1,000 per bond and coupon interest rate of 15% pa. If the cost of the bond is 18% p.a.; (1) What will be the market price of this bond? 3marks (ii) If the bond was issued by a company located on the moon, will you pay the same price as in (i) above? Explain. [Total marks 10) Imark