MGT201 - Financial Management) VU Midterm Current Papers Fall 2011 of Virtual university of paksitan (www.vusolutions.com)
Calculate the price of stock if directors of Baby and Baba's Shoes have decided to pay Rs. 4 per share as dividend, which is expected to grow at a constant rate of 8 percent per year from now on. Investors' required rate of return is 18 %.
Sardar & Sardar Consultant Company is currently paying Rs. 2 per share as dividend, which is expected to grow at a constant rate of 7 percent per year. Investors require a rate of return of 16 percent to invest in stocks with this degree of riskiness. Calculate the price of this stock?
Suppose govt. pays coupon on its bond quarterly; calculate the intrinsic value of bond under the following circumstances:
A 10 year bond with 10% coupon rate is selling at Rs. 1,050. Face value of the bond is Rs. 1,000. Required rate of return is 12%.
