UBFB3013 Banking Operations and Treasury Management

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF BUSINESS AND FINANCE

ACADEMIC YEAR 2022/2023

BACHELOR OF BUSINESS ADMINISTRATION (HONS) BANKING AND FINANCE

BACHELOR OF ECONOMICS (HONS) FINANCIAL ECONOMICS

Tutorial 3: Source of Finance

1. Funding is always a key priority of any institution. Funding (capital) generally falls into
two categories –debt and equity. List down the full range of sources of debt available,
examine their characteristics and discuss as to when it is most appropriate to use them so
that it is most effective?

i) Debenture
ii) Warrants
iii) Euromarkets
iv) Convertibles

2) Discuss the method of “offer for sale by tender” when the shares are issued for first time
in the market.

3) Suppose each RM100 nominal is convertible into 20 ordinary shares. The market price of
the convertible is RM108, while the current ordinary share price is RM4.80.

i) Compute the conversion premium.

ii) What is the conversion value for above situation?

4) Why certain companies prefer to sale and leaseback the assets for their daily business
operation?

5) Discuss the factors that affect dividend policy in a company.

6) Explain to Mr. Chong on considerations that should be made in assessing investment of

his company’s short term cash surpluses.