BBF30403: SunTech Bhd is a company that owns several technology stores in Malaysia: Corporate Finance Assignment, WOU, Malaysia
| University | Wawasan Open University (WOU) |
| Subject | BBF30403 Corporate Finance Assignment |
QUESTION 2
(a) SunTech Bhd is a company that owns several technology stores in Malaysia. They are considering opening a new store in Penang taking advantage of the proximity to a university campus.
This project is financed with a zero-coupon bond with a market value today of RM291.26 million. The bond matures in one year. The project will generate a cash flow in two years of either RM300 million with a probability of 60% or RM280 million with a probability of 0.4%. The yield to maturity of the bond is 3% annually. Assume investors are risk neutral. Calculate;
(i) The face value of debt.
(ii) Annual return demanded by investors Explain;
(iii) The difference between yield to maturity and cost of debt (Rd).
(iv) Advantages of financing this project with equity instead of debt.
(b) Your investment portfolio consists of RM15,000 invested in only one stock, Roof Berhad. The risk-free interest is 5%. The expected return is 12% and standard deviation of 40% for Roof Berhad. The market portfolio has an expected return of 10% and a standard deviation of 18%. The CAPM conditions are all verified.
(i) Graph the position of Roof Berhad and market portfolio in Capital Market Line (CML).
(ii) Calculate the systematic risk and idiosyncratic risk of Roof Berhad.
Get Solution of this Assessment. Hire Experts to solve this assignment for you Before Deadline.
Get Help By Expert
Unleash success in BBF30403 Corporate Finance assignments with our exclusive assignment helper online services, designed for Malaysian students. Explore seamless support, including specialized homework writing help malaysia that allows you to pay our experts for personalized assistance.
Recent Solved Questions
- NBBS3303: Communication and Counselling Skills for Nurses Assignment, OUM, Malaysia Demonstrate knowledge and understanding of the specific skills that are essential for counseling and in healthcare
- Â A Windy Turbine Power Forecasting Model: Diploma in electrical and electronic engineering Report, IIU, Malaysia
- Analyse the challenges for the business to go international using digital marketing and give suggestions to overcome the challenges: Digital Marketing, Assignment, Malaysia
- MAT1830: Discrete mathematics for computer science Assignment, MUM, Malaysia The Corruption Perceptions Index uses perceptions of the general public, business people
- Occupational Safety and Health Assignment, UPM, Malaysia Across many industries, it’s important for employees to watch out for fire hazards like ignition hazards, electrical overloading
- Fundamental of Integrated Marketing Communication Case Study, UUM, Malaysia With an average annual growth rate of 11.2% over the past twelve years, tourism has been integral to the economy
- AINT003-4-C: You are required to develop a website with an appropriate web development tool: Web Design And Technology, Individual Assignment, APU, Malaysia
- Consider, if feasible to do so, reporting the number of records identified from each database or register searched: Advanced Nursing Research Assignment, IIUM, Malaysia
- BUSM50003: Big Data Research Paper, SU, Malaysia Explain your research philosophy and methodologies and In particular, comment on the research design
- Law of Tort Case Study, BAC, Malaysia John, a student at a local university, frequently visits a nearby coffee shop during his breaks. The coffee shop is owned
