Question

UL QUESTIUNS - February, 2020 Question 2019, STM bought 720 shares of Grace and Glory stock at 300 per share. tal dividend of €800,000 by the end of the year. On 31 July 2019, STM On the 14 February 2019, STM STM received a total dividen stock sells at e411 per share. À Find the total investment How much did SIM earn in capital gain iWhat is the dividend per share? jy. What is the total return in percentage? V. What is the total return in cedis? Question 2 a. RAY Co. Itd. is current! being traded at the stock excha ca Itd. is currently paying ISU per share as dividend. The shares are currently aded at the stock exchange at €6,000 per share if the dividends are expected to at the rate of 8% per year, determine the discount rate or required rate of return. pays ¢120 per share as dividend currently. Dividend are expected to grow of 5% per year into the foreseeable future. If the required rate of return is 12%, determine the value of the share/ price of the share. b. Asempa Ltd pays ¢120 per share as at the rate of 5% per year into the fore Question 3 of Richnee's is investment is in ABC shares and the remainder in QRS shares. Richnee in ABC and 18% on QRS. The standard deviation (0) on returns on expects a return of 21% in ABC and 18% on ORS. The ston ORS 21%. If the correlation co-efficient between ABC and QRS is 0.082, ABC is 19% and QRS 21%. If the correlation co-effie calculate: a. thee expected return on the portfolio b. the standard deviation for the portfolio (risk of the portfolio) Question 4 a. State any three ways by which insurable interest can exist. b. There are basically four methods of providing for indemnity. Explain each c. Adjo Ltd insured its property against fire with Vanguard Assurance Company for GH¢60,000 subject to average. The equipment's value at the time of loss was GH¢72,000. Calculate the insurer's liability when the insured suffers a fire loss of GH¢36,000. Give reasons for your answer.

Answer 1

1-
i-	total investment	number of shares bought*purchase price	720*300	216000
ii-	STM earn in capital gain	(selling price-purchase price)*number of shares	(411-300)*720	79920
iii-	total dividend per share	total dividend/no. of shares	800000/720	1111.11
iv-	total return in %	(capital gain + dividend)/total investment	(79920+800000)/216000)	407%
v-	total return in cedis	(capital gain + dividend)	(79920+800000)	879920