QUESTION TWO (30 MARKS) Hesham Ventures intends to issue corporate bonds to be listed on the Ghana Stock Exchange (GSE). The bonds will have a maturity of 10 years. You are an analyst at Jepp Davis Investment Bank. Your Boss, Mr. Sam is responsible for pricing this issue. He has tasked you to come up with explanations as to how a number of factors will affect the pricing of the bond. Your Boss has asked you to analyse each factor separately using only the information that you have been provided with. XYZ Bank has been appointed as Trustee for the issue. a. What is the role of XYZ Bank as regards the bond issued by Hesham Ventures? (4 marks) b. If the bond has a floating rate feature, how will its initial rate differ from if it had a fixed rate set for the tenor of the bond? (3 marks) c. Hesham Ventures has pledged its buildings worth GHS 10, 000,00 to creditors in case it is unable to pay the bond. (3 marks) d. Hesham Ventures is considering listing the bonds on the newly established Kumasi Stock Exchange (KSE). The GSE provides better trading opportunities for investors. (4 marks) e. Hesham ventures has decided not to set up a fund towards the eventual retirement of the bond. (3 marks) f. Hesham has stated in the indenture that it reserves the right to redeem its bonds after 5 years. (3 marks) g. Hesham Ventures has indicated in the indenture that it is willing to purchase its bonds from investors if they decide to surrender the bonds. (3 marks) h. Investors have the right to convert Hesham's bonds into equity at a later date. (3 marks) i. The government has decided to waive the tax incentives provided to investors who purchase securities listed on the Ghana Stock Exchange. (4 marks)