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    Man307 2017 18 Final Exam Questions SiUT

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    Kin
    This document appears to be a practice exam for a business finance course. It contains 5 questions assessing students' understanding of concepts like bond valuation, stock valuation, weighted average cost of capital calculation, capital budgeting techniques like payback period and net present value, and compound interest word problems. The exam is out of 100 total points and students are given 70 minutes to complete it.

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    Man307 2017 18 Final Exam Questions SiUT

    Uploaded by

    Kin
    51 views4 pages
    This document appears to be a practice exam for a business finance course. It contains 5 questions assessing students' understanding of concepts like bond valuation, stock valuation, weighted average cost of capital calculation, capital budgeting techniques like payback period and net present value, and compound interest word problems. The exam is out of 100 total points and students are given 70 minutes to complete it.

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    man307-2017-18-final-exam-questions-SiUT

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    This document appears to be a practice exam for a business finance course. It contains 5 questions assessing students' understanding of concepts like bond valuation, stock valuation, weighted average cost of capital calculation, capital budgeting techniques like payback period and net present value, and compound interest word problems. The exam is out of 100 total points and students are given 70 minutes to complete it.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    51 views4 pages

    Man307 2017 18 Final Exam Questions SiUT

    Uploaded by

    Kin
    This document appears to be a practice exam for a business finance course. It contains 5 questions assessing students' understanding of concepts like bond valuation, stock valuation, weighted average cost of capital calculation, capital budgeting techniques like payback period and net present value, and compound interest word problems. The exam is out of 100 total points and students are given 70 minutes to complete it.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 4

    ÇAĞ UNIVERSITY

    FACULTY OF ECONOMICS & ADMINISTRATIVE SCIENCES


    2017-18 FALL SEMESTR
    MAN 307 BUSINESS FINANCE FINAL EXAM

    Student Name : Warning:


    Student ID : This test consists of 5 questions in 2 pages.
    Class : Please control pages and number of questions!
    Each question is 20 points. Total point is 100.
    Date :
    Time is 70 minutes.
    Signature : ………………………….. Successes!
    .
    1. ABC bond has a coupon rate of 6% with interest paid annually, has 9 years
    until maturity. If the bond is priced to yield 7%,

    a. What coupon payments do bond holders receive each year? (6p)

    b. What is the bond’s value today? (7p)

    c. What will happen to the bond price if the yield to maturity increases to
    8%? (7p)

    1
    2. Consider each of the following stocks, and solve for the missing element:
    (Hint: r=(Div1/ P0)+g )

    Stock Expected Expected Required rate Value of a


    dividend growth in of return share of stock
    dividends
    A $1.00 3% 5% ?
    B ? 4% 6% $26
    C $1.00 ? 10% $21
    D $0.75 2% ? $7.65

    3. Bunkhouse Electronics has the following capital structure. Its corporate tax
    rate is 35%. What is WACC?

    Security Market Value Required Rate of Return


    Debt 40 8%
    Preferred Stock 20 10%
    Common Stock 60 15%

    2
    4.

    Cash Flows (dollars)


    Project 0 Year 1 Year 2 Years 3 Years 4 Years
    A -5000 +1000 +1000 +3000 0
    B -1000 0 +1000 +2000 +3000
    C -5000 +1000 +1000 +3000 +5000

    a) What is the payback period on each of the following projects? (8p)

    b) If the opportunity cost of capital is 10%. What is the NPVs of the each
    projects? Which of these projects are worth pursuing? (12p)

    3
    5. Fill the blanks with appropriate phrases!.

    i. At 8 % compounded annually, ........... years will it take $750 to double.

    ii. ........... years will it take for $136,000 to grow to be $468,000 if it is invested in
    an account with an annual interest rate of 8%?

    iii. $................... would I pay for an investment will be worth $16,000 in three
    years (Assume interest is 5%)

    iv. You must $................... deposit today, if you wish to have $6000 at the end of
    24 months, if the bank pays 8% APR?

    v. If expected rate of return is 13% and dividend yields 6%, probably sustainable
    growth will be ........

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