NAME (PRINT):
Last/Surname
STUDENT #:
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SIGNATURE:
UNIVERSITY OF TORONTO MISSISSAUGA
DECEMBER 2012 FINAL EXAMINATION
MGT338H5F
Business Finance I
Tanya Kirsch
Duration - 2 hours
Aids: Non-Programmable Calculators
The University of Toronto
Question 1: (12 marks)
(a) (10 marks) Find the present value of the following 16 payments: A payment of 100 at the end of
each year for the next 8 years, and the payments growing after that at 5%/year for exactly 8
more years. [So the gth payment in 9 ye
Finance 1
Tutorial #4: Discounted Cash Flow
SOLUTION
You receive the following projection of unit sales of a new smart phone your company is
planning to launch next year:
Year
1
2
3
4
5
Unit sales
88,000
96,000
109,000
118,000
95,000
The new phones will s
TUTORIAL IN WEEK 10
CH. 8 - RISK & RETURN, and CH. 9 - CAPM
Question 1: (Booth Textbook, 3rd Ed. Ch. 8, Q 40)
You are interested in using short selling to increase the possible returns from your portfolio.
You have short sold $200 of ABC and invested $1,2
TUTORIAL IN WEEK 10
CH. 8 - RISK & RETURN, and CH. 9 - CAPM
Question 1: (Booth Textbook, 3rd Ed. Ch. 8, Q 40)
You are interested in using short selling to increase the possible returns from your portfolio.
You have short sold $200 of ABC and invested $1,2
BACKGROUND NOTES TO INSIDE JOB DOCUMENTARY
The basic function of financial markets is straightforward to match people who have money with
people who need money. The way finance and Wall Street actually operates can get very complicated 1.
A review of the
Finance I - Additional FCF question (from Fall 2011 Quiz 1)
Question 3
Assumptions:
Depreciation
Increase in non-cash working capital
Tax rate:
New Capital Expenditure
$10
$10
40%
$15
Income statement
Revenue
Expense (including depreciation of $10)
EBIT
I
Additional FCF question:
Candy Industries had the following operating results for 2011:
The abbreviated balance sheet of Candy Industries as at 2010 and 2011 was as follows:
Required:
a) Calculate the Free Cash Flow to Equity for Candy Industries for 2011
BUSINESS FINANCE 1
Lecturer: Tanya Kirsch
Lecture 2
The Time Value of Money cont.
1
Objectives for todays lecture
To explain the calculation of the EAR
To do some complex TVM calculations
To explain an annuity due vs an ordinary annuity
To remind you of h
MGT338 TUTORIAL #2 (Week 3)
QUESTION 1: Time value of money (Retirement problem)
Your 45 year old sister has heard that you know all about the time value of money and wants
to start saving for her retirement. She expects to retire at 65. She thinks that s
MGT 338, Winter 2014 Exam - 120 minutes
Allowed tool: calculator
1. Take a bond that matures in 5 years. It has an annual coupon payment
of 8% with the usual semi-annual payout and $1; 000 face value.
i) Assume that the required rate of return is 10%. Wha
2015 Midterm solutions
1. i) The expected growth rate is
g = ROE
b = 0:3 0:15 = 4:5%:
ii) The value is
P0 =
Div0 (1 + g)(1
r g
b)
= 1:8M
1:045 0:7=(0:12
0:045) = 17:56M:
iii) The value without growth is Div0 =r = 1:8M=0:12 = 15M , so the present
value of
University of Toronto
At Mississauga
MGT338H Business Finance I
Term Test October 19, 2011
Duration: 1 hour and 50 minutes
Aids allowed
Calculator
Name: _
Student # : _
Question
1 (25 marks)
Grade
2 (20 marks)
3 (15 marks)
4 (20 marks)
5 (20 marks)
Total:
University of Toronto
At Mississauga
MGT338H Business Finance I
Quizz 2 Wednesday 4-5 p.m.
Duration: 50 minutes
aids allowed:
Calculator
Name: _
Student # : _
Question
Grade
Question1(4marks)
Question2(4marks)
Question3(6marks)
Question3(6marks)
Total:
MG
1. i) p = 1; 000 because Y T M = coupon rate
ii)
1
1 (1+k)6
1; 000
p = P V = 50
+
= 950:83
k
(1 + k)6
where
k = 0:12=2 = 0:06:
iii) Price in ii) is lower than in i) because the YTM is higher.
2. a) Growing perpetuity
PV =
100(1 + g)
104
=
= 2; 600:
r g
0:
1. You consider pursuing a university degree that costs $25; 000 each year
for four years. (You pay the tuition in one sum at the beginning of each year.)
Your wage upon graduation (four years from now) is $60; 000 and it increases
6% every year. If you d
DEPARTMENT OF MANAGEMENT
UNIVERSITY OF TORONTO MISSISSAUGA
MGT338H5S LEC0101
Business Finance I
Course Outline - Winter 2015
Class Location & Time
Instructor
Office Location
Office Hours
E-mail Address
Course Web Site
Thu, 03:00 PM - 05:00 PM CC 2130
Gabo
MGT338H Business Finance I
Quiz 1 (Winter 2014) February 6
Aids allowed: Calculator and formula sheet
1.
(40)
Bond A has a coupon of 10% (paid semi-annually), a maturity of 5 years, and currently
trades at a yield to maturity of 10%. Bond A has a $1,000 f
MGT338H Business Finance I
Quiz 1 (Winter 2015) January 27
Aids allowed: Calculator and formula sheet
1. You purchase a bond today for $900 that has a 5% coupon rate, paid semi-annually, and
has 10 years to maturity. The face value of the bond is $1,000.
MGT 338 Midterm Exam, February 12, 2015,
You have two hours for this exam, you can only use calculators and the
distributed formula sheets.
1. A Corporation has just reported earnings of $1.8m, and plans to retain
30% of its earnings. The ROE is 15%.
i) W
MGT 338, Winter 2014 Exam - 120 minutes
Allowed tool: calculator
1. Take a bond that matures in 5 years. It has an annual coupon payment
of 8% with the usual semi-annual payout and $1; 000 face value.
i) Assume that the required rate of return is 10%. Wha
Solutions
1. Stock A has a standard deviation of 10% and an expected return of 15%.
Stock B has a standard deviation of 12% and an expected return of 12%.
i) Can a risk averse investor ever invest in Stock B?
Yes, because it is only the systematic risk (a
University of Toronto
At Mississauga
MGT338H Business Finance I
Term Test October 20, 2010
Duration: 1 hour and 50 minutes
Aids allowed
Calculator
Name: _
Student # : _
Lecture section (please circle your section, and instructor name)
L0101 Wednesday 2-4