Winter 2007 Midterm - UNIVERSITY OF TORONTO at Scarborough...

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UNIVERSITY OF TORONTO at Scarborough MANAGEMENT MGTC09 (Intermediate Finance) Mid term Exam Date: March 3, 2007 TOTAL MARKS: 100 TIME ALLOWED: 110 min. Prof. Syed W. Ahmed Number of Pages including the title page: 8 Items Allowed: Calculator and one 8.5”x11” single sided crib sheet. Only handwritten (no photocopies) crib sheet is allowed Please do all the problems with pen or at least write the final answer with pen. You can write on both sides of a page to answer the questions. STUDENT’S NAME:________________________________________________ Last First Middle STUDENT’S I.D. NO.:_______________________________________________ SECTION: L01 L02 L30 L31 Mon 11-1 Mon 3-5 Mon 7-9 Tues 5-7 Please circle your section QUESTION NO. MAX. MARKS MARKS OBTAINED 1 20 __________________ 2 25 __________________ 3 25 __________________ 4 30 __________________ TOTAL MARKS 100 __________________ GOOD LUCK
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-2- QUESTION 1: Denise Ganhao & Carmen Lau Limited (DCL) and Amanda Ng & Frozan Sharifi Inc. (AFI) are identical firms in all respects except for their capital structure. DCL is all equity financed with $50,000,000 in stock. AFI uses both stock and perpetual debt. Its stock is worth $40,000,000 and the interest rate on its debt is 9%. Both firms expect EBIT to be $10,000,000. Ignore taxes. a.
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This note was uploaded on 04/19/2010 for the course MGT MGTC09 taught by Professor Syedahmed during the Spring '10 term at University of Toronto- Toronto.

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Winter 2007 Midterm - UNIVERSITY OF TORONTO at Scarborough...

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