UNIVERSITI MALAYSIA PERLIS
Peperiksaan Semester Kedua
Sidang Akademik 2013/2014
20 June 2014
BFTI07 - Principles of Finance
[Prinsip - Prinsip Kewangan]
Masa : 3jam
Please make sure that this question paper has ELEVEN (11) printed pages including t
(a) Discuss the criteria should be used in the evaluation of alternative investment proposals.
Use cash flows rather than accounting profits, because cash flows allow us to analyze the
time element of the flows correctly.
Examine cash flows on
Number of cups sold
Gross Profit Margin
GPM in RM
Net Profit Margin
PREFERRED STOCK & COMMON STOCK (ANSWER)
1. IT Technologies preferred stock sells for RM80 and pays RM9 dividends each year.
Calculate the expected rate of return.
Answer: rp = D/V = 9/80 = .1125 = 11.25%
2. Blueberry Berhad issued preferred stock with a 1
In the spring of 2014 the CFO of Placebo Pharmaceuticals, Inc. took a proposal to the firms
board of director to distribute a noncash dividend to the firms shareholders in the form of new
shares of common stock. Specifi
COST OF CAPITAL
a) Percy Motors has a target capital structure of 40% debt and 60% common equity, with no
preferred stock. The yield to maturity on the company outstanding bonds is 9% and its
tax rate is 40%. Percys Chief Finance Officer (CFO)