QUESTION 4 (25 MARKS)

a) Bendang Berhad is interested to invest in bonds. Currently, the financial manager is evaluating both Bond A and Bond B. Type of Bond Coupon Rate Compounding Year Bond A 7% per annum Annually 12 years Bond B 9% per annum Annually 12 years

Determine the value of each bond if the current market yield for both bonds is 8 percent. 5 marks

B) Below is a partial Statement of Financial Position of Koindu Berhad

Common stock (RM 2) RM40,000,000

Premium RM25,000,000

Retained earnings RM20,000,000

Total Net Worth RM85,000,000

The company declared a 2 for 1 stock split.

i) Calculate the new par value. (3 marks)

ii) Calculate the new numbers of share outstanding. (3 marks)

c) Elaborate any four (4) reasons for the company to declare stock dividend. (8 marks)

d) Partial Statement of Financial Position of Daim Bhd. as at 31 December 2022.

Capital Position RM

Common stock (RM2) 3,000,000

Premium 2,000,000

Retained Earnings 5,000,000

Total Net Worth 10,000,000

The current market price for Daim Berhad stock is RM10. Show the effect on the company's Statement of Financial Position if the company declares a 20 percent stock dividend.