You are the Chief Financial Officer for Jolly Roger Ltd, an Australian corporation with operations in Australia, New Zealand, the U.S.A. and the U.K. It is listed on the New York Stock Exchange, the London Stock Exchange and the Australian Securities Exchange.

The firm has embarked on a major expansion plan and you need to raise $120 million to finance this expansion. You decide to do this by issuing short-term debt securities, long-term bonds and shares.

Q1

Which of the following methods are you least likely to use to issue the shares?

a.

Seasoned offering

b.

Best efforts offering

c.

IPO or float

d.

Underwritten offering

QUESTION 2

The bonds will be issued in the U.S., denominated in Australian dollars. How would you describe these bonds?

a.

American bonds.

b.

Foreign bonds

c.

Domestic bonds

d.

Eurobonds

Q3/

Which of the following methods are you least likely to use to issue the bonds?

a.

Underwritten offering

b.

Best efforts offering

c.

Auction

d.

All of these methods are equally likely

Q4/

You decide that you will issue floating rate bonds on 15 May 2021. The bonds have a face value of $1,000 and will make semi-annual coupon payments at a rate based on BBSW plus a margin of 1.6%. The day fraction count to be used will be Actual/365.

If the BBSW is 3.1% on 15 May 2021 and 4.4% on 15 November 2021, how much interest will be payable on each bond on 15 November 2021?

a.

$15.12

b.

$23.69

c.

$30.25

d.

$11.85

Q5/

You realise that you will need to prepare a prospectus in order to issue the shares. If that is the case, how will you be issuing the shares?

a.

Rights Issue

b.

Public Offer

c.

Dividend Reinvestment Plan

d.

Private Placement