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A company issues a 20-year bond with semiannual coupon of 8% and a YTM of...

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Finance

  1. A company issues a 20-year bond with semiannual coupon of 8% and a YTM of 6%. Calculate the value of the bond and conclude whether it is being traded at a premium, discount or at par.

2. Forecast the working capital based on the below information:

Stock of finished goods - $5000

Stock of raw materials - $12,000

Total Sales - $350,000 of which $50,000 is cash sales; Customers take 1 month to pay their debts.

Total rent paid for the year - $16,000 of which 3 months is prepaid.

Expenses Average time taken to pay:

Salaries - $250,000 - Time taken is 2 weeks.

Rent - $150,000 - Time taken 1.5 months.

There is a 15% contingency to be considered.

3. Explain the origin and importance of Just in Time inventory management and the pros and cons of following this policy.

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