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1. Analysis of BlueSteel Limited's long-term debts(bonds), share valuation, and dividend policies (maximum 550 words) (5+ 5 + 15 = 25 marks)
   1. 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.
   2. 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).
   3. 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).
2. Analysis of BlueSteel Limteds cost of capital (maximum 550 words) (5+ 5 + 15 = 25 marks)
   1. (1) What is the main benefit of debt financing? How does it affect the firms cost of capital? (2) How do the cost of debt, the cost of equity, and the weighted average cost of capital behave as the firms financial leverage increases from zero?
   2. Discuss the importance of the knowledge of the cost of capital the selected company.
   3. 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.

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