Analysis of BlueSteel Limited's long-term debts(bonds), share valuation, and dividend policies (maximum 550 words) (5+ 5

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Analysis of BlueSteel Limited's long-term debts(bonds),
share valuation, and dividend policies (maximum 550 words)
(5+ 5 + 15 = 25 marks)

Explain the relationships between bond prices and interest
rates and explain why it is important for company managers as well
as investors to understand the relationship.
What long term borrowings are available to the company (e.g.
bonds, long term loans)? Provide information on terms (e.g. coupon
rates, maturity period for bonds, interest rates and term period
for loans).
Describe the types of shares held by the
company. What can you say about the history of company
share issues, retained earnings and payment of dividends? Are they
following any specific policies for these? (please refer notes to
the accounts in the annual reports).



Analysis of BlueSteel Limted’s cost of capital (maximum 550
words) (5+ 5 + 15 = 25 marks)

(1) What is the main benefit of debt financing? How does it
affect the firm’s cost of capital? (2) How do the cost of debt, the
cost of equity, and the weighted average cost of capital behave as
the firm’s financial leverage increases from zero?
Discuss the importance of the knowledge of the cost of
capital the selected company.
Calculate company cost of capital for, 2017, 2018, 2019, 2020
and 2021 financial years. Compare with the required rate of return
and assess the actual performance.