mide - Midterm Examination, BUS312 NAME: _ Student #_...

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Midterm Examination, BUS312 NAME : ___________________________________ Student #____________________ Instructions: For qualitative questions, point form is not an acceptable answer. For quantitative questions, an indication of how you arrived at particular numbers is required for the purpose of assigning part marks. There are a total of 70 marks on this examination. This examination is composed of 8 questions and 8 pages. Please answer all questions on the examination. No other sheets of paper will be marked. Please use pen rather than pencil for your responses. The examination period is one hour and fifty minutes: there will be no extensions. 1. (9 marks) Your boss has given you the financial statements of ABC Company Limited for year-end 1998. You have access to no other information. Your boss is considering an equity investment in ABC. She wants you to do the financial analysis. She is concerned about risk. List at least three distinct types of “risk” that you might bear as a shareholder in a firm. As a financial analyst, for each type of risk that you identify, which financial ratio, ratios, or financial measures might you calculate to assess the extent of that risk. Recognise that any of your calculations must use only the financial statements that you have at hand. Be explicit in your response. Use no numerical examples. 2. (5 marks) Comment briefly on the following assertion. “Because any new shares that are sold by a firm to raise funds for business purposes eventually trade on a stock market (like the Toronto Stock Exchange) this sale is referred to as a secondary market sale.” Use no numerical examples in your response. 3. (5 marks) Comment briefly on the following assertion. “In order to make an equity investment in a firm, shareholders expect to receive cash from the firm in the form of dividends and capital gains.” Use no numerical examples in your response. 4.
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mide - Midterm Examination, BUS312 NAME: _ Student #_...

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