5593 Words23 Pages

SEAT NUMBER: ……….… ROOM: .………………. FAMILY NAME.………….....…………………………. This question paper must be returned. Candidates are not permitted to remove any part of it from the examination room. OTHER NAMES…………….…………………..…….. STUDENT NUMBER………….………..……………..
SESSION 2 EXAMINATIONS NOVEMBER 2012
Unit Code and Name: AFIN252, Applied Financial Analysis and Management Time Allowed: 3 hours plus 10 minutes reading time. Total Number of Questions: 50 Multiple Choice Questions plus 8 full response questions. Instructions: 1. PART A (30 marks): There are 50 multiple choice questions. Answers to these must be recorded on a red-coloured General Purpose Answer Sheet which will be marked by a computer. Please make sure your name is on this sheet.
2.*…show more content…*

Question 6 Coolibah Holdings Limited is expected to pay dividends of $1.13 every six months for the next three years. If the current price of Coolibah stock is $22.40, and Coolibah 's equity cost of capital is 16%, what price would you expect Coolibah 's shares to sell for at the end of three years? A) $26.74 B) $28.82 C) $29.36 D) $31.36 E) $34.96 4(41) Question 7 Ascension Limited will pay a dividend of $1.80 per share one year from today and a dividend of $2.40 per share two years from today. It is expected that Ascension 's share price will be $44 per share immediately after the second dividend payment. If Ascension has an equity cost of capital of 8%, what is the maximum price that a prudent investor would be willing to pay for an Ascension Limited share today? A) $39.27 B) $40.22 C) $41.45 D) $42.40 Question 8 Which of the following statements is FALSE? A) As firms mature, their earnings exceed their investment needs and they begin to pay dividends. B) Total return equals earnings multiplied by the dividend payout rate. C) Cutting the firm 's dividend to increase investment will raise the share price if, and only if, the new investments have a positive net present value (NPV). D) We cannot use the constant dividend growth model to value the shares of a firm with rapid or changing growth. 5(41) Question 9 Bandicoot Enterprises just announced that it plans to cut its dividend (in one year

Question 6 Coolibah Holdings Limited is expected to pay dividends of $1.13 every six months for the next three years. If the current price of Coolibah stock is $22.40, and Coolibah 's equity cost of capital is 16%, what price would you expect Coolibah 's shares to sell for at the end of three years? A) $26.74 B) $28.82 C) $29.36 D) $31.36 E) $34.96 4(41) Question 7 Ascension Limited will pay a dividend of $1.80 per share one year from today and a dividend of $2.40 per share two years from today. It is expected that Ascension 's share price will be $44 per share immediately after the second dividend payment. If Ascension has an equity cost of capital of 8%, what is the maximum price that a prudent investor would be willing to pay for an Ascension Limited share today? A) $39.27 B) $40.22 C) $41.45 D) $42.40 Question 8 Which of the following statements is FALSE? A) As firms mature, their earnings exceed their investment needs and they begin to pay dividends. B) Total return equals earnings multiplied by the dividend payout rate. C) Cutting the firm 's dividend to increase investment will raise the share price if, and only if, the new investments have a positive net present value (NPV). D) We cannot use the constant dividend growth model to value the shares of a firm with rapid or changing growth. 5(41) Question 9 Bandicoot Enterprises just announced that it plans to cut its dividend (in one year

Related

## Caladonia Products Integrative Problem

1382 Words | 6 Pagesseveral mutually exclusive projects (Keown, Martin, Perry, & Scott, 2005). The lack of experience on the assistants part has also lead to the CEO requesting not only that the assistant provide a recommendation but also to respond to a number of questions aimed at judging the assistants understanding of the capital budgeting process (Keown, Martin, Perry, & Scott, 2005). Financial Assistants Assignment The financial assistant received the important assignment by memorandum from the CEO

## Case02 Piedmont

1133 Words | 5 Pagesthis question. The answers for this question assume a useful life of 5 years. Using a discount rate of 8 percent, the net present value of all benefits is $1,732,836.16; the net present value of all costs is $1,640,384.79; the overall net present value is $92,451.36, and the project breaks even in approximately 3.84 years. Using a 10 percent discount rate, the net present value of all benefits is $1,645,201.46; the net present value of all costs is $1,576,173.19; the overall net present value is $69

## Net Present Value and Net Cash Flow

1220 Words | 5 PagesCHAPTER 26 NAME 10-MINUTE QUIZ A SECTION #___________________ Indicate the best answer for each question in the space provided. 1 Which of the following is not a capital budgeting decision? a Whether to acquire a subsidiary company. b Whether to expand a product line. c Whether to fill a special order. d Whether to purchase a fleet of trucks. 2 Which of the following is an example of a nonfinancial consideration in capital budgeting? a Will an investment generate adequate cash flows to promptly

## Finc600 Week 2 Practice Quiz

737 Words | 3 Pagescom/shop/finc600-week-2-practice-quiz/ Corporate Finance Week 2 Practice Quiz Question 1 of 15 If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = + 1.04; then the closing price for the stock for the previous trading day was? A. $56.18 B. $54.10 C. $55.66 D. None of the above. Feedback: Previous closing = today's closing net chg. = 55.14 - 1.04 = $54.10 Question 2 of 15 The value of a common stock today depends on: A. Number of shares

## Essay about Rock Creek Golf Club

1510 Words | 7 PagesCase 27-2: Rock Creek Golf Club Submitted by: Adam Kessler Submitted to: Dr. Alan Czyzewski Submitted for: MBA 613 Submitted on: Wednesday, 4/11/12 Question 1 An amortization table has been completed regarding the potential loan that RCGC would need to obtain in order to fund the purchase of 40 gasoline-powered golf carts. RCGC would need to obtain a loan for $89,600 at an eight percent interest rate for five years with a payment due at the end of each year in order to fund the purchase

## Cash Budget For 3 Months Ending 31st August 2015

1350 Words | 6 PagesQuestion 1 Zahlee Ltd Cash budget for 3 months ending 31st August 2015 Appendix 1 June July August Receipts: Sales Cash 60’000 40’000 75’000 Credit (50%) 50’000 60’000 40’000 Sub-letting old warehouse 2’500 2’500 2’500 Loan received - - 30’000 Total receipts (a) 112’500 102’500 137’500 Payments: Purchases (suppliers) 60’000 50’000 50’000 Purchase of new transport vehicles 45’000 - 55’000 Wages 16’000 16’000 18’000 Overheads 19’000 23’000 21’000 Interest of bank loan 100 100 100

## Chapter 7— Net Present Value and Other Investment

1149 Words | 5 Pagesmanagers Chapter 7— Net Present Value and Other Investment Question 1 : List the methods that a firm can use to evaluate a potential investment. There are discounted and non-discounted cash-flow capital budgeting criteria to evaluate proposed investments. They are 1) Net present value: NPV is a discounted cash flow technique, which is the difference between an investment’s market value and its cost. NPV = Present value of cash inflow- Present value of cash outflow The

## Why Is A Corporation?

1106 Words | 5 Pagesguaranteed when using NYSE. Question Two Operating cash flow results from the firm 's normal business activities. Operating cash flow is calculated the net income against items such as changes to accounts receivable, changes in inventory, and depreciation (Farshadfar & Monem, 2013). It measures whether an organization can generate sufficient positive cash flow. The adjusted activities do not involve actual money transactions such as depreciation which is a non-cash expense. Net working capital is defined

## Valuation Quiz Essay

1381 Words | 6 PagesQuestion 1 Palm & Sun's (PS) free cash flows are expected to be $200 million next year and $488 million two years from now. After that, free cash flows are expected to grow at a constant rate of 3% per year forever. P&S’s WACC is 11%, its cost of equity is 14% and its cost of debt is 9.5%. They have $400 million of debt and $78 million in cash on their balance sheet. Use the discounted cash flow model to find P&S’s current equity value (rounded to the nearest million dollars).

## The Relationship Between Time And Money

1545 Words | 7 Pagesfoundation of every financial decision that we, the people made in the world today. Whether it will be saving money for a future event or considering a loan to pay for a current financial need. Everyday, everywhere people are greatly affected by the time value of money. Firms and organizations, investors and capitalists use this concept in particular for them to decide what to accomplish with their money and how to achieve their goals. They give money today in order to receive money in the future. Companies

### Caladonia Products Integrative Problem

1382 Words | 6 Pages### Case02 Piedmont

1133 Words | 5 Pages### Net Present Value and Net Cash Flow

1220 Words | 5 Pages### Finc600 Week 2 Practice Quiz

737 Words | 3 Pages### Essay about Rock Creek Golf Club

1510 Words | 7 Pages### Cash Budget For 3 Months Ending 31st August 2015

1350 Words | 6 Pages### Chapter 7— Net Present Value and Other Investment

1149 Words | 5 Pages### Why Is A Corporation?

1106 Words | 5 Pages### Valuation Quiz Essay

1381 Words | 6 Pages### The Relationship Between Time And Money

1545 Words | 7 Pages