Reference no: EM132995771
Question -
a) Briefly discuss the differences between corporatisation and privatisation of public assets.
b) Briefly explain two arguments for and two against the privatisation of public assets.
c) An investment bank purchased a Treasury bond at a government bond auction today. This bond has exactly 5 years to maturity and will pay annual coupons of 2% per annum. All bonds in this issue (i.e. Treasury bonds with a coupon rate of 2% per annum paid yearly with 5 years to maturity) are currently trading in the bond market now at their face value of $1,000,000. Rather than just buy-and-hold this bond, the investment bank decides to strip the coupon payments off this newly issued 5 year to maturity bond to create zero coupon bond and a separate 5 year income only annuity; rights to payments from the zero coupon bond and the annuity stream will be sold to investors.
i. If the zero coupon bond created can be sold at a yield of 1.5% per annum (paid yearly), what is its principle stream worth?
ii. What is the income stream (annuity of coupons) sold for at the yield of 1.5% per annum (paid yearly)?
iii. What is the dollar (and percent) gain made by the investment bank? Briefly comment on this transaction from the investment bank's perspective.
d) Discuss the role of an underwriter in a debt or an equity capital raising.
e) Identify and briefly explain the main areas within an investment bank. How do investment banks make their profits?
|
Prepare the je to record the bad debt expense
: If Allowance for Doubtful Accounts has a $2,400 credit balance, Prepare the JE to record the bad debt expense
|
|
Calculate the copy department costs allocated to sales
: Assuming 5,730,000 copies were made during the year, 3,050,000 for sales and 2,680,000 for administration, calculate copy department costs allocated to sales
|
|
Provide one example of an ethical issue
: Provide one example of an ethical issue and one example of a legal issue that may arise within eCommerce.
|
|
What is the required treatment of each of the events
: What is the required treatment of each of the below events in the financial statements? Justify your decisions.
|
|
What is its principle stream worth
: If the zero coupon bond created can be sold at a yield of 1.5% per annum (paid yearly), what is its principle stream worth
|
|
What is the relationship between expected return and yield
: Canyon Buff Enterprise just issued a three-year, zero-coupon corporate bond at a price of $74. What is the relationship between expected return and yield
|
|
What was the most recent annual dividend per share paid
: If the company maintains a constant 5.5 percent growth rate in dividends, what was the most recent annual dividend per share paid on the stock
|
|
Calculate Walt realized gain
: Walt sells the residence for $400,000 and pays $20,000 in commissions and legal fees in connection with the sale. Calculate Walt's realized gain
|
|
What is the total carrying amount of intangible assets
: Moreover, the entity agreed to pay €50,000 to another entity as consulting fee each year for 5 years payable every January 1. What is the total carrying amount
|