FIN2601 Assignment 1 Semester 1 ANSWERS 2026 - Due 16 April 2026

FIN2601 Assignment 1 Semester 1 ANSWERS 2026 QUESTION 1 Read the information provided and then answer the questions that follow. Indicate all the steps in your calculations – it is NOT enough to provide only a final answer. Transportation Hero is a diversified logistics and transportation holding company that operates through several subsidiaries offering services across the logistics value chain. The group has invested a total capital amount of R500 million across five subsidiaries. Each subsidiary operates in a different segment of the logistics industry and is exposed to varying levels of systematic risk due to differences in operational activities, demand sensitivity and competitive conditions. The level of systematic risk for each subsidiary is measured using beta coefficients. The investment amounts and beta values of the subsidiaries are presented as follows: Question 2 [8 marks] Read the information provided and then answer the questions that follow. Indicate all the steps in your calculations – it is NOT enough to provide only a final answer. Outbout Operations issued a six-year bond with a par value of R1 000 one year ago. The bond pays interest of R40 every six months. When the bond was issued, it sold for R889, reflecting prevailing market interest rates at that time. Market interest rates remained stable for the past year but declined significantly a few days ago. As a result, the current market price of the bond is R1 042. Investors and management are interested in understanding how the changes in market interest rates affect the bond’s yield, returns and valuation. Use the information above to answer the following questions: 2.1 Calculate the yield to maturity (YTM) of the bond one year ago at the time it was purchased. (2 marks) Question 3 [4 marks] Read the case study below and answer the question that follows. Agency problems in a growing e-commerce business: The Glam Goddess case In 2015, Zaire and Aiyanna founded Glam Goddess and initially managed the business themselves, resulting in minimal agency problems. As the business pivoted to an e-commerce model and expanded rapidly after 2018, the founders hired professional managers to run daily operations. This created a separation between ownership and control. As Glam Goddess