Define the term Financial Engineering and explain 3 main components of financial engineering. (8 marks) Question 2
Question:
Define the term "Financial Engineering" and explain 3 main components of financial engineering. (8 marks)
Question 2
1) Explain the factors responsible for financial innovations. (12 marks)
Question 3
Calculate, when the price is Sh.32 per share, the theoretical market price per share of the enlarged capital after the issue (the ex-rights price) and also the market value of a right. (8 marks)
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Question 4
a) Explain the main reasons why multi-national companies (MNC) seek foreigninvestment.
Question 5
Explain the types of political risks that face multi-national firms in foreign countries.
-national firms can take to minimize political risks
Question 7
Calculate the after-tax cash inflows expected from the an-amortized portion of the old bond's issuance cost.
Question 8
b) Calculate the annual after-tax cash inflows from the issuance of the new bondsassuming the 10-year amortization. (2 marks)
Answer
Question 9
Calculate the after-tax cash outflow from the call premium required to retire the old bonds.
Question 10
Determine the incremental initial cash outlay required to issue the new bonds.(10mks)