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Assignment 02 soulutions_202_2011_1_e

# Assignment 02 soulutions_202_2011_1_e - MNF2023...

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MNF2023/202/1/2011 DEPARTMENT OF FINANCE AND RISK MANAGEMENT AND BANKING FINANCIAL MANAGEMENT (MNF2023) TUTORIAL LETTER 201 MNF2023/201/1/2011 (First semester) STREPIESKODE BAR CODE UNISA P248(A)

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2 MNF2023/202 CONTENTS Page 1 INTRODUCTION 2 LECTURERS 3 SUGGESTED SOLUTIONS TO ASSIGNMENT 01 4 IMPORTANT INFORMATION 4.1 Answer books 4.2 Examination format 4.3 Preparing for the examination. 4.4 Assignments 5 CONCLUDING REMARKS 2 2 3 10 10 10 10 10 Dear Student 1 INTRODUCTION The purpose of this tutorial letter is to suggest correct answers to the questions in Assignment 02. Your prescribed book for this module is: Gitman, LJ, Principles of managerial finance. 12 th edition. 2 LECTURERS Direct your academic queries only to the two lecturers listed below. Mr AB Sibindi (Head of Module) Office 3.118 AJH van der Walt Building Ms PL Makoni Office 3.116 AJH van der Walt Building [email protected] Please contact the departmental helpdesk on 012 429 4949/6723 for all other queries.
3 MNF2023/202 3 SUGGESTED SOLUTIONS TO ASSIGNMENT 02 Please work through the suggested solutions and note where you went wrong. Page references to the 12 th edition of your prescribed book (Gitman : 2009 ) have been provided to assist you in understanding the assignment solutions. Question 1 The correct option is 4. N = (3 x 2) PMT = (1000 x 0.16) / 2 = 80 INPUT 6 N -940 PV 80 PMT 1000 FV I = 9,35 Annual yield = 2 x 9.35 = 18.70% Refer to the prescribed book pages 307 to 308. Question 2 The correct option is 1. This question requires you to apply the basic common stock valuation equation on page 345 of your prescribed textbook. Hence, 1 0.18) (1 3 + + 2 0.18) (1 5 + + 2 0.18) (1 58 + = Price of the share = R47,78 Refer to the prescribed book page 345. Question 3 The correct option is 3. This relationship can be presented as follows: Retained earnings of the previous year + net profit for current the year – dividends paid out in the current year = retained earnings for the current year. Therefore, 555 000 retained earnings (2006) + 172 500 net profit current year (2007) – dividends paid Current year (2007) = retained earnings Current year (2007). Solving for dividends paid will give you

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4 MNF2023/202 555 000 + 172 500 – X dividends paid (2007) = 675 000. Therefore X = R52 500 Refer to the table and explanation on page 51 of your prescribed textbook (chapter 2). Question 4 The correct option is 2. FV 11664 17280 19000 47944 10000 16000 19000 : 0 1 2 3 Future value = 47 944 Refer to the prescribed book page 183.
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Assignment 02 soulutions_202_2011_1_e - MNF2023...

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