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ASSIGNMENT
4/3/2010
7.1) V= Rs.11x PVIFA 15% 5Years + Rs. 100x PVIFA15% 5Years
= Rs.11x 3.352 +Rs.100x 0.497
= Rs. 86.57
7.2) V= Rs.12x PVIFA14% 7Years +Rs. 100x PVIFA14% 7Years
= Rs.12x 4.288+ Rs.100x 0.4
= Rs. 91.46
V= Rs.12x PVIFA12% 7Years + Rs.100x PVIFA12% 7Years
= Rs.12x 4.564+ Rs.100x 0.452
= Rs.99.97
120 (1000 750) / 7
7.3) YTM=
0.4 1000 0.6 750
= 18.32%
14 (100 80) / 10
7.4) YTM=
0.6 80 0.4 100
= 18.18%
7.5) P= 6x PVIFA8% 12Years+ 100x PVIFA8% 12Years
= 6x 7.536+ 100x 0.397
= 84.916 84.92
7.6) Post Tax interest (C) A B
12(1- 0.3) = 8.4 10(1- 0.3) = 7
Post tax maturity 100-[(100-70) x 0.1] 100-[(100-60) x0.1]
value (M) =Rs. 97 = Rs. 96
For A
8.4 (97 70) / 10
Post Tax YTM= =13.74%
0.6 70 0.4 97
For B
7 (96 60) / 6
Post Tax YTM= = 17.47%
0.6 60 0.4 96
7.7) P= Rs.6x PVIFA8% 14Years + Rs.100x PVIFA8% 14Years
= Rs.6x 8.244+ Rs.100x 0.34
= Rs.83.464
7.8) Do = Rs.2 g= 0.06 r= 0.12
D1 Do (1 g ) 2 1.06
Po = Rs.35.33
rg rg 0.12 0.06
P2 = Po x (1+g)2
= 35.33(1.06)2 = 39.696 Rs.39.7
7.9) Do = 12 g= 0.1 r= 0.15
12 12
Po = 240
0.15 0.1 0.05
Do 2
P2 =
r g 0.12 g
32
2= 32(0.12- g)
= 3.84- 32g
32g= 1.84
g= 5.75%
1.5(1 0.04)
7.11) 8=
r 0.04
8r+0.32= 1.44
R= 0.14= 14%
7.12) D1=1.5*1.12=1.68
D2=1.68*1.12=1.882
D3=1.882*1.12=2.11
D4=2.11*1.12=2.36
D5=2.36*1.08=2.55
D6=2.55*1.08=2.75
D7=2.75*1.08=2.97
D8=2.97*1.08=3.21
Present Value
(@14%)=1.68*0.877+1.882*0.769+2.11*0.675+2.36*0.592+2.55*0.519+2.75*
0.456+2.97*0.4+3.21*0.35=10.63
Pg=Dg/(r-gn)=Dg(1+gn)/(r-gn)
=[1.5*1.124*1.084*1.05] /[0.14-0.05]
=37.46
Present Value=37.46/(1.148)=13.13
Sum of components=10.63+13.13=23.76
1.15
1 1.12
2.3 125.54
= 0.03
= 127.84
=74.79
7.16) D1=Do(1+g)=4x(1.2)=4.8
1.2
1 1.18 ^8 4.8 1.2^ 7 1.1
Po=4.8x 0.18 .2 0.18 0.1 1 /(1.18)^8
=28.78+52.43
=81.21
7.17) Po=D1/(r-g)
Po=8/(0.15-0.12)=266.67
Po=(E1/r)+PVGO
Hence, 266.67=(20/0.15)+PVGO
PVGO=133.34
Note 1
Note 2
Written Down
Year Cost Dep (25%) Value
1 15.00 3.75 11.25
2 11.25 2.81 8.44
3 8.44 2.11 6.33
4 6.33 1.58 4.75
5 4.75 1.19 3.56
Note 3
No of Loan
Installment Amount Installment Interest(12%)
1 80 0 12
2 80 0 12
3 80 0 12
4 80 16 12
5 64 16 9.6
6 48 16 7.2
7 32 16 4.8
8 16 16 2.4
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