1. A 20 year old callable bond can be called back at year 15. At the time of issuance, the bond was sold for RM875, and the callable value is RM1,100. The annual coupon rate is 6%

a) Determine cost of debt at the time of issuance? b) Determine the current cost of debt.

2, Pic Berhad wishes to issue sukuk worth RM1 million and the maturity value is RM1,000. The sukuk is expected to pay a semi-annual coupon of 5% per year for the next 15 years. The investment banker estimated that it can be sold for RM930 each, and the floatation cost is 2.5% .The sukuk can be called at year 10 and the maturity value will be RM1,200 each. Tax rate is 24%.

a) Calculate the annual cost of debt. _________% b) The after tax cost of debt is _______% c) If the issuance is a callable sukuk, what is the annual cost of debt? d) The after tax cost of debt is _________%

3. The company has the following financing:

Motor vehicles: RM125,000 -- rate 2.85% p.a.

Property: RM1.2 million -- rate 3.01% p.a.

Business Financing: RM800,000 -- rate 7.3%

The tax rate is 24%.

a) Total debt financing is RM_________. b) Weight for Property financing is ______% c) Weighted cost of debt on financing is _______% d) After tax cost of debt on financing is ________%