Answer the questions below with reference to the following sources: 1. Company Perspective - The a2 Milk Company Limited [30 marks] Source 1: The a2 Milk Company Limited Annual Report 2019 https://thea2milkcompany.com/wp-content/uploads/The-a2-Milk-Company_FY19-AnnualReport_double-pages-1.pdf Source 2: The a2 Milk Company Limited (A2M.AX) Yahoo Finance https://au.finance.yahoo.com/quote/A2M.AX/

answer the following questions with the given sources:

1. What was the market capitalization of "A2M", on the 1 June 2020, assuming that the total number of share outstanding is the same as per the end of the 2019FY? (Use the closing price on that day)
2. Consider "A2M" 2019 Annual Report. What type of source (non-current) is the company primarily using to finance its long-term operations? According to you what is the main disadvantage of this strategy?
3. "A2M" wants to reduce its weighted average cost of capital by replacing some of its equity with long-term debt. Assume that "A2M" would like to raise $200 million with a new issuing of bonds. Assume that the issue will have a coupon rate of 3% with a 5 year maturity. Assume this are semi-annual coupon bonds and each have a face value of $1.000 and the required rates of return for similar bonds in the market is 4%. What would be the issuing price of these bonds? How many bonds does the company have to sell to achieve its target?