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
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
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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