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f) MDIST has several issues of long term debt as well as a portfolio of short and medium loans at various rates including some variable interest rates One issue of debt, 10 million 51/2 % debenture 1990-2025, can be redeemed now or at any time up to 2025. The chairman is concerned about the choice of timing for the redemption of this debenture. i) Analyse the main advantages and disadvantages of including fixed interest debt finance in the firm's financial structure 11) 8 marks Evaluate the factors to be considered when deciding on the timing of the denture redemption. Consider both the case where the redemption must be financed from the issue of further funds and the case where no further funds need to be issued. 7 marks Critically analyse and evaluate whether it is rational for the firm to obtain, at any one time, debt finance from various sources with various duration and various interest rates or utilising the source which offers the lowest effective interest rate 10 marks iii) f) MDIST has several issues of long term debt as well as a portfolio of short and medium loans at various rates including some variable interest rates One issue of debt, 10 million 51/2 % debenture 1990-2025, can be redeemed now or at any time up to 2025. The chairman is concerned about the choice of timing for the redemption of this debenture. i) Analyse the main advantages and disadvantages of including fixed interest debt finance in the firm's financial structure 11) 8 marks Evaluate the factors to be considered when deciding on the timing of the denture redemption. Consider both the case where the redemption must be financed from the issue of further funds and the case where no further funds need to be issued. 7 marks Critically analyse and evaluate whether it is rational for the firm to obtain, at any one time, debt finance from various sources with various duration and various interest rates or utilising the source which offers the lowest effective interest rate 10 marks iii)

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