BBF305/03: Investment and Portfolio Management Assignment, WOU, Malaysia Corus Berhad is interested to invest in bonds Currently, the financial manager is evaluating both Bond A and Bond B

University Wawasan Open University (WOU)
Subject BBF305/03: Investment and Portfolio Management

QUESTION 1 

a) Corus Berhad is interested to invest in bonds. Currently, the financial manager is evaluating both Bond A and Bond B. Bond A pays an 8 percent coupon semi-annually and matures in 12 years. Bond B pays a 7 percent coupon annually having a maturity period of 13 years. Determine the value of each bond if the current market yield for both bonds is 8 percent.

b) Below is a partial balance sheet of WOU Berhad

BBF305/03: Investment and Portfolio Management Assignment, WOU, Malaysia Corus Berhad is interested to invest in bonds Currently, the financial manager is evaluating both Bond A and Bond B

The company declared a 2 for 1 stock split.
i) Calculate the new par value.

ii) Calculate the new numbers of shares outstanding.

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

d) Partial Balance Sheet of Daisy Bhd. as of 31 December 2018

BBF305/03: Investment and Portfolio Management Assignment, WOU, Malaysia Corus Berhad is interested to invest in bonds Currently, the financial manager is evaluating both Bond A and Bond B

The current market price for Daisy Berhad stock is RM10. Show the effect on the company’s balance sheet if the company declares a 20 percent stock dividend.

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