(Mt) – SEU Management Principles of Finance Worksheet

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College of Administrative and Financial Sciences Assignment 3 Principles of Finance (FIN101) Deadline for students: (22/04/[email protected] 23:59) Course Name: Principles of Finance Student’s Name: Course Code: FIN101 Student’s ID Number: Semester: 2nd CRN: Academic Year: 1443/1444 H, Second Semester For Instructor’s Use only Instructor’s Name: Students’ Grade: Level of Marks: Instructions – PLEASE READ THEM CAREFULLY ❖ This assignment is an individual assignment. ❖ The Assignment must be submitted only in WORD format via the allocated folder. ❖ Assignments submitted through email will not be accepted. ❖ Students are advised to make their work clear and well presented. This also includes filling in your information on the cover page. ❖ Students must mention question numbers clearly in their answers. ❖ Late submitted assignments will NOT be entertained. ❖ Avoid plagiarism; the work should be in your own words; copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. ❖ All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). Submissions without this cover page will NOT be accepted. Assignment Questions: (Marks: 05) Q1. What is the current market price of a bond that has a face value of $1 million at the end of 2 years and pays semiannually coupons at a rate of 5.2% p.a., if the discount rate is 8% p.a.? (Show your calculations) (1.5 Marks) Q2. Facebook paid its common stocks a dividend of $0.77 last year. The company expects growth to continue at 10% p.a. for the next 2 years and 5% p.a. thereafter. What is the current price of the share? common shareholders’ rate of return is 10% p.a. (Show your calculations) (2 Marks) Q3. Your company is looking at a project that requires a $50,000 investment. It is expected that the project will generate cash flows of $15,000 in year 1, $20,000 in year 2, $17,000 in year 3, and $13,000 in year 4. Using the NPV method, should the project be undertaken if your shareholders’ required rate of return is 5%? (Show your calculations) (1.5 Marks)

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