Lesson One Questions

What is true about the way you should approach financial goals across different stages of your life? A.As you progress through life, your values and financial possibilities will gradually change, which leads to an evolution of your financial goals over time. b. Most people tend to make more money as they grow older and more experienced. After a certain point in your life you should have enough money to meet all of your financial goals, at which point you will no longer need to concern yourself with long-term goals. c. You need to be consistent and determined when it comes to financial goals. The financial goals you make as a young adult should stay in place for the rest of your life. d. Failure to meet a financial goal is a sign of personal weakness, so you should never alter a goal until you have completed it exactly as you imagined it

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Question 2 Kamer is an investment fund that invests on the Ghana Stock Exchange. In recent times the economy has gone through four different cycles which analyst believe may be repeated in the years ahead. Kamet is reviewing its investment strategy and is looking for the best way to make good returns for its clients. The returns on three assets selected by Kamet are provided below: Business Cycle Normal Boom Near Recession Recession You are required to: i. Compute the expected return and risk of each asset and advise Kamet as to which asset to invest more funds in on the basis of a) expected return on the assets b) riskiness of the assets (Hint: compute the coefficient of variation of each asset and select the asset with the lowest coefficient of variation; CV= B(RY Kamet has just informed you of three strategies (a). (b) and (c) that it wants to use. (a) In this strategy. Kamet will invest in the order of expected retum hence the highest proportion of its funds is to be invested…

Question 3 Activities in financial markets have direct effects on individual wealth, the behavior of business and the efficiency of the economy. Three financial markets deserve particular attention: the bond market, the stock market, and the foreign exchange market. Can you explain how each one of these markets affect people wealth, business behavior and efficiency of the economy? Be specific about the relationship between these markets and their impact on the above-mentioned variables.

Question 2 Kamet is an investment fund that invests on the Ghana Stock Exchange. In recent times the economy has gone through four different cycles which analyst believe may be repeated in the years ahead. Kamet is reviewing its investment strategy and is looking for the best way to make good returns for its clients. The returns on three assets selected by Kamet are provided below: Business Cycle Normal Boom Near Recession Recession You are required to: Probability 0.30 0.40 0.10 ???? Unilever 40% 20% 20% 12% Starwin 40% 45% 30% 50% Anglogold 30% 40% 15% 30% i. Compute the expected return and risk of each asset and advise Kamet as to which asset to invest more funds in on the basis of: a) expected return on the assets b) riskiness of the assets (Hint: compute the coefficient of variation of each asset and select the asset with the lowest coefficient of variation; CV=. 8 E(R)

Question 6 If you have $285000 in assets and a net worth of $71000, then how much do you have in liabilities? Your Answer: Answer

which one is correct please help? QUESTION 36 Investors can form earnings growth expectations from various sources, including ____.   a. assumed product development   b. current earnings and retention rates   c. investors’ required rate of return   d. potential sales growth

Identify information used in an investment decision Look forward to the daywhen you will have accumulated $5,000, and assume that you have decided to investthat hard-earned money in the common stock of a publicly owned corporation. Whatdata about that company will you be most interested in, and how will you arrangethose data so they are most meaningful to you? What information about the company will you want on a weekly basis, on a quarterly basis, and on an annual basis?How will you decide whether to sell, hold, or buy some more of the firm’s stock?

Tutorial Questions   Explain to John, your mentor, the primary goal of the organization?   Your manager is requesting you to provide an explanation to the question. Would the role of a financial manager be likely to increase or decrease in importance if the rate of inflation increased?   What is the difference between stock price maximization and profit maximization?   What are the three principal forms of business organization? What are the advantages and              disadvantages of each?    What mechanisms exist to influence managers to act in shareholders’ best interests?     What is an agency relationship?     What agency relationships exist within a corporation?     What are financial intermediaries, and what economic functions do they perform?               How does an efficient capital market help to reduce the prices of goods and services?               What is the term structure of interest rates? What is a yield curve? How should users and savers of…

In what way is your home an investment?   Long-term equity growth in your home is a component of your wealth.

A 78.

What is your primary objective in choosing a company in which to invest money? What key items or relationships will you look for in each financial statement that will help you decide in which company to invest?

Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $22.92 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, E a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share. b. Judging by your finding in part a and the stock's offering price, should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond 2023 will be 7% rather than 6%. What effect would this finding have on your responses in parts a and b? a. The value of CoolTech's entire company is $| (Round to the nearest…

Answer question between 70 to 100 words in your own language 1- Why are investors and managers concerned about efficiency of the capital market?

Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $7.41 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, E a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share. b. Judging by your finding in part a and the stock's offering price, should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond year 4 will be 4% rather than 3%. What effect would this finding have on your responses in parts a and b? a. The value of CoolTech's entire company is $. (Round to the…

True or False 1. Personal financial planning is the process of getting rich. 2. In evaluating alternatives in financial goals, each choice involves an opportunity cost. 3. A comprehensive financial plan can enhance the quality of one's life.

Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $4.61 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share. b. Judging by your finding in part a and the stock's offering price, should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond year 4 will be 3% rather than 2%. What effect would this finding have on your responses in parts a and b? a. The value of CoolTech's entire company is $ Data table (Click on…

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Question 4An investor is considering providing Howard with $50,000 as an initial investment.a. Explain five (5) risks associated with making such an investment for the Investor.b. Explain five (5) risks associated with taking such an investment for Howard.c. Do you believe that Howard’s business has high growth potential? Provide a detailed justification for your answer.

As a student, what would be your strategy to accumulate wealth?

Problem 1 It is now 2024. You have been assigned as a financial advisor of a Philippine start-up company They assigned you to value its existing business had they exited the market 6 years ago, meaning in 2018. Details of the company are as follows: Futher assume that the company will nat exist beyond 2023, meaning the going concem principle will not apply. Also assume that the client wants you to use the dividend discount model for this project. 2018 6,458,000.0 2019 7,412,000.0 2020 8,126,000.0 2022 8,941,000.0 9.457.000.0 42.0% 28.0% 30.0% 2021 2023 Sales Variable expenses Fixed expenses Tax Rate 10,025,000.0 40.0% 30.0% 44.0% 30.0% 30.0% 38.0% 40.0% 41.0% 30.0% 29.0% 21.0% 31.0% 25.0% 24.0% 25.0% After conducting a financial due diligence, you found that: 1.) 2019 sales are inclusive of a 250.000 sales invoice that were in transit as of EOY 2019, thus delivered to the client on 2020, with terms of FOB Shipping Point. 2.) 2020 sales excluded a contract signed for senvices worth…

1. Cost of money Everyone uses money, and it is important to understand what factors affect the cost of money. Consider the following scenario: A friend comes to you and asks you to invest in his business instead of investing in Treasury bonds. You think he has a good business model, so you tell him you are willing to invest as long as the expected return on the investment is at least four times the return you would have received on the Treasury bonds.   Determine which of these fundamental factors is affecting the cost of money in the scenario described: Risk   Inflation   Time preferences for consumption

Question 3 You just graduated with MBA in Accounting and Finance from the University of Professional Studies and are employed by JEK Investments Ltd, a brokerage firm in Ghana. Kweku The Don, an illiterate businessman, visited your firm for a piece of investment advice and possibly make some investments. Although an accomplished businessman, he was advised by his son to buy some shares on the Ghana Stock Exchange in other to diversify his portfolio. Your boss has asked you to consider either Cronox Industries or Zealous Incorporated The share prices and dividends for the two companies and the returns on the Ghana Stock Exchange are shown below for the period 2016 - 2021. Zealous Incorporated Stock price Dividend Stock price Dividend (GHe) Cronox Industries Year GSE Returns (GHe) Market Returns ) 2016 7.62 55.75 2017 2018 2019 12 0.90 60.00 2.25 0.07 10.75 17 0.95 57.25 48.75 2.50 0.12 1.00 2.75 0.08 2020 15.75 1.06 52.30 2.90 0.23 2021 17.25 1.15 48.75 3.00 0.18 a. Compare the two…

Consider the table given below to answer the following question. Asset value Earnings Year Net investment Free cash flow Return on equity Asset growth rate Earnings growth rate Present value 1 12.00 1.44 1.44 0.00 0.12 0.12 2 13.44 1.61 1.61 0.00 0.12 0.12 0.12 million 3 15.05 1.81 1.81 0.00 0.12 0.12 0.12 4 16.86 2.02 1.52 0.51 0.12 0.09 0.12 5 18.38 2.21 1.65 0.55 0.12 0.09 0.09 6 20.03 2.30 1.80 0.50 0.115 0.09 0.04 7 21.83 2.40 1.31 1.09 0.11 0.06 0.04 8 23.14 2.43 1.39 1.04 0.105 0.06 0.01 9 24.53 1.96 1.47 0.49 0.08 0.06 -0.19 Assuming that competition drives down profitability (on existing assets as well as new investment) to 11.5% in year 6, 11% in year 7, 10.5% in year 8, and 8% in year 9 and all later years. What is the value of the concatenator business? Assume 10% cost of capital. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. 10 26.00 2.08 1.56 0.52 0.08 0.06 0.06