The Australian Securities and Investment Commission decides to increase the disclose requirements for Initial Public Offerings (IPO). The decision is expected significantly add to the complexity and time taken for prospectus preparation. Which of the following is the most likely consequence of this change in regulation?

Rio Tinto has 10 million shares outstanding and has total earnings of $40 million. Each Rio share is $20. 

Calculate the PE ratio of Rio.

BHP has 100 million shares outstanding and has total earnings of $800 million. Each BHP share is $32. 

Calculate the PE ratio of BHP.

The next dividend BHP is expected to pay a $3 dividend per share, which is expected to grow at 2% p.a. into perpetuity.

With a beta of 0.88, the All Ords returning 12% and government bonds yielding 2.5%, what is the value and implied price of the share?

(enter your answer without $ to 2 decimal places)

The next dividend BHP is expected to pay a $3 dividend per share. 

With a beta of 0.88, the All Ords returning 12% and government bonds yielding 2.5%, what is the value and implied price of the share?

(enter your answer without $ to 2 decimal places)

BHP has a beta of 0.88.

Government bonds are yielding 2.5%.

The All Ords is returning 12%

Calculate the expected return of BHP.

(enter your answer without % to 2 decimal places)

Which of the following is not a clear benefit provided by financial institutions?

What are the 3 primary risks that banks face?

T9 EIC 6 (Tutorial)

While businesses have a credit rating for their organisation as a whole, individual debt issuances can also have bespoke credit ratings. 

Continuing on from KCT 5,  the credit rating for Melbourne Co.'s commerical paper improves, while the credit rating for Melbourne Co.'s bonds worsen.

Given that Dylan is thinking of investing in the money market and Sophie is interested in the bond market, which of the following will likely be changes in both Sophie's and Dylan's YTM for Melbourne Co.'s debt issuances?

(select all correct answers only, selecting the wrong answer will result in a mark penalty. selecting all answers will result in 0)

T9 EIC 8 (Tutorial)

Continuing from KCT 7, if Monash Co. has a significant worsening in credit rating, how will the bond buyers purchase be most likely affected? (ignore buyer capital constraints)