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You are an investor in Blue Sky Ltd. You hold: 500 ordinary shares 400 preference shares 400 fixed-rate bonds 500 floating-rate bonds The following information

You are an investor in Blue Sky Ltd.  You hold:

500 ordinary shares

400 preference shares

400 fixed-rate bonds

500 floating-rate bonds

The following information relates to your holdings:

  1. (a)   There are 1 million ordinary shares on issue, which carry full voting rights.  Statutory voting is used at the AGM.
  2. (b)   There are 1 million preference shares on issue.  The preference dividend is equal to 9% of the nominal face value of $100.  The company made a loss last year and no dividends were paid (although all dividends were paid in all previous years).  The preference shares are non-cumulative.
    (c)  The fixed-rate bonds have a face value of $200, pay quarterly coupon payments at a coupon rate of 8% p.a., and will mature today.
     (d)  The floating-rate bonds have a face value of $300 and pay annual coupon payments based on BBSW plus a margin of 2.3%.  A coupon payment is due today.  The BBSW took on the following values on the following dates:
  1. Today:  4.5%
  2. 6 months ago:  4.7%
  3. 12 months ago:  4.4%


What will be your final cash flow, due today, from your fixed-rate bonds?
 What will be your total coupon payment, due today, on the floating-rate bonds?

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