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compute for required
V Chu only QUESTION 2: 130 marks) (This Question is Conipulsory) (a) ABC...
compute for various required ou equity capital using Wo aillerent methods. 20 marks Co Dondend capitalization...
compute for various required
ou equity capital using Wo aillerent methods. 20 marks Co Dondend capitalization of QUESTION 3: Capital Fuset pricing me Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plans Precices! * to sell it after 5 years at a price of Tshs 97,000 (at end of year 5). REQUIRED: Compute the following measures...
as part of the previous post, please help question 5,6 and 7 (1) How is the...
as part of the previous post, please help question 5,6 and
7
(1) How is the value of a coupon bond calculated? 12) What is the value of a 9-year bond, Tshs 100,000 par value with a 10% annual coupon, if its required rate of return is 9%? (3) What is the value of the bond described in part (2) if it pays interest serfi-annually, other things being equal? 14) What is approximate YTM of a 6-year, Tshs 100,000 par...
please answer the questions according to the marks appointed per question and sub question. this is...
please answer the questions according to the marks appointed per
question and sub question. this is a banking and finance question
so please answer it accordingly.
8. (a) Explain the concept of Macaulay duration and explain the relationship between Macaulay duration and: (i) bond maturity (ii) interest rates (iii) bond coupon rate (7 marks) (b) Calculate the price and Macaulay duration of a five-year 5% coupon bond where the market interest rate is 5%. Assume the par value of the...
compute required INS Puration =303822 years QUESTION 2: i ABC Bank has 400,000 shares of ordinary...
compute required
INS Puration =303822 years QUESTION 2: i ABC Bank has 400,000 shares of ordinary shares outstanding. The shares are traded in the over-the-counter market where the current price is Tshs 600 per share. Dividends per share for the next year are expected to be Tshs 50 and have been growing at the same rate as earrings, 8% a year. The current rate on Treasury bills is 12% and the expected future return for all shares in general is...
Question 1: Bond Valuation (20 marks) Lend Lease Ltd is planning to issue 7-year bonds with...
Question 1: Bond Valuation (20 marks) Lend Lease Ltd is planning to issue 7-year bonds with semi-annual coupon payments. The market interest rate for such bonds is 8%. Coupon payments will be made at a rate of 9.17%. The management of Lend Lease Ltd has determined the company needs to raise $875,000 to fund the purchase of a new office and wants to use the proceeds of the bond issue for that purpose. i) Calculate the price of these 9.17%...
QUESTION ONE A 91 days treasury bill with a par value of K100 has been issued...
QUESTION ONE A 91 days treasury bill with a par value of K100 has been issued at a price of K97.55. Required: (a) Calculate the bond equivalent yield of the Treasury bill. (b) If the Treasury bill above was a 182 instrument, would the bond equivalent yield be more than or less than the bond equivalent yield calculated above? A 273 Treasury bill with a par value of K100.00 has a bond equivalent yield of 12.75%, which would be achieved...
Ouestion 15 marks You are a security analyst in ABC Investment Company Limited and are asked...
Ouestion 15 marks You are a security analyst in ABC Investment Company Limited and are asked to analyse BBA Company, an IT employment agency that supplies computer programmers to financial institutions BBA's beta coefficient is 1.2. The risk-free rate is 7% and the expected rate of retum on the market is 12% BBA just paid a dividend of $2.00 each share (a) What is the expected rate of return on BBA's stock by using CAPM? (b) What would be the...
QUESTION 2 ABC Ltd. has decided to raise capital via a rights issue. The share price...
QUESTION 2 ABC Ltd. has decided to raise capital via a rights issue. The share price is currently $5.50 and ABC intends to raise $5m. There are currently 6.25m shares in issue and ABC is offering a 1 for 5 rights issue. Calculate the Ex-Rights Price. (4 marks) BBC Co is a medium-sized manufacturing company which is considering a 1 for 5 rights issue at a 15% discount to the current market price of $4.00 per share. Issue costs are...
please use interpolation method only ( formula) Dont use excel or table QUESTION 4 (16 MARKS)...
please use interpolation method only ( formula)
Dont use excel or table
QUESTION 4 (16 MARKS) A RM100 par value bond issued by AT&N with maturity date of 2032 and a static coupon rate of 8.50 percent. AT&N pays interest to hondholders on a semi-annual basis on Januar 15 and July 15. On January 1, 2013. the bond had 20 years left to maturity. The market's required yield to maturity for a similarly rated debt was 7.5 percent per year....
Sm Question 3 (25 marks) The following information of Fortune Co. is given: Balance Sheets: Assets...
Sm Question 3 (25 marks) The following information of Fortune Co. is given: Balance Sheets: Assets Sm Liabilities and Equity Current assets 10 Current liabilities Fixed assets 90 Non-current liabilities Equity Total assets 100 • Total equity and liabilities 20 30 50 100 The net income of this financial year is $4 million. The dividends of Fortune Co. are $2 million in total. The current stock price is $6.5 per share and 30 million shares are outstanding. Now, the board...
compute for various required
ou equity capital using Wo aillerent methods. 20 marks Co Dondend capitalization of QUESTION 3: Capital Fuset pricing me Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plans Precices! * to sell it after 5 years at a price of Tshs 97,000 (at end of year 5). REQUIRED: Compute the following measures...
as part of the previous post, please help question 5,6 and
7
(1) How is the value of a coupon bond calculated? 12) What is the value of a 9-year bond, Tshs 100,000 par value with a 10% annual coupon, if its required rate of return is 9%? (3) What is the value of the bond described in part (2) if it pays interest serfi-annually, other things being equal? 14) What is approximate YTM of a 6-year, Tshs 100,000 par...
please answer the questions according to the marks appointed per
question and sub question. this is a banking and finance question
so please answer it accordingly.
8. (a) Explain the concept of Macaulay duration and explain the relationship between Macaulay duration and: (i) bond maturity (ii) interest rates (iii) bond coupon rate (7 marks) (b) Calculate the price and Macaulay duration of a five-year 5% coupon bond where the market interest rate is 5%. Assume the par value of the...
compute required
INS Puration =303822 years QUESTION 2: i ABC Bank has 400,000 shares of ordinary shares outstanding. The shares are traded in the over-the-counter market where the current price is Tshs 600 per share. Dividends per share for the next year are expected to be Tshs 50 and have been growing at the same rate as earrings, 8% a year. The current rate on Treasury bills is 12% and the expected future return for all shares in general is...
Question 1: Bond Valuation (20 marks) Lend Lease Ltd is planning to issue 7-year bonds with semi-annual coupon payments. The market interest rate for such bonds is 8%. Coupon payments will be made at a rate of 9.17%. The management of Lend Lease Ltd has determined the company needs to raise $875,000 to fund the purchase of a new office and wants to use the proceeds of the bond issue for that purpose. i) Calculate the price of these 9.17%...
QUESTION ONE A 91 days treasury bill with a par value of K100 has been issued at a price of K97.55. Required: (a) Calculate the bond equivalent yield of the Treasury bill. (b) If the Treasury bill above was a 182 instrument, would the bond equivalent yield be more than or less than the bond equivalent yield calculated above? A 273 Treasury bill with a par value of K100.00 has a bond equivalent yield of 12.75%, which would be achieved...
Ouestion 15 marks You are a security analyst in ABC Investment Company Limited and are asked to analyse BBA Company, an IT employment agency that supplies computer programmers to financial institutions BBA's beta coefficient is 1.2. The risk-free rate is 7% and the expected rate of retum on the market is 12% BBA just paid a dividend of $2.00 each share (a) What is the expected rate of return on BBA's stock by using CAPM? (b) What would be the...
please use interpolation method only ( formula)
Dont use excel or table
QUESTION 4 (16 MARKS) A RM100 par value bond issued by AT&N with maturity date of 2032 and a static coupon rate of 8.50 percent. AT&N pays interest to hondholders on a semi-annual basis on Januar 15 and July 15. On January 1, 2013. the bond had 20 years left to maturity. The market's required yield to maturity for a similarly rated debt was 7.5 percent per year....
Sm Question 3 (25 marks) The following information of Fortune Co. is given: Balance Sheets: Assets Sm Liabilities and Equity Current assets 10 Current liabilities Fixed assets 90 Non-current liabilities Equity Total assets 100 • Total equity and liabilities 20 30 50 100 The net income of this financial year is $4 million. The dividends of Fortune Co. are $2 million in total. The current stock price is $6.5 per share and 30 million shares are outstanding. Now, the board...
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