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    Opened Book: Corporate Finance Ii MNJ206 / MNJ43

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    Fortuna Ragil Kumala
    The document is a mid-term exam for a Corporate Finance II course consisting of 4 questions. The exam covers topics like: [1] Calculating stock value using the dividend discount model. [2] Calculating a company's weighted average cost of capital (WACC). [3] Determining the best financing option between equity and debt given different levels of earnings before interest and taxes (EBIT). [4] Determining the effect on a company's equity accounts of declaring a 15% stock dividend. The exam is 120 minutes long and candidates are only permitted to use a non-programmable calculator.

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    Opened Book: Corporate Finance Ii MNJ206 / MNJ43

    Uploaded by

    Fortuna Ragil Kumala
    26 views2 pages
    The document is a mid-term exam for a Corporate Finance II course consisting of 4 questions. The exam covers topics like: [1] Calculating stock value using the dividend discount model. [2] Calculating a company's weighted average cost of capital (WACC). [3] Determining the best financing option between equity and debt given different levels of earnings before interest and taxes (EBIT). [4] Determining the effect on a company's equity accounts of declaring a 15% stock dividend. The exam is 120 minutes long and candidates are only permitted to use a non-programmable calculator.

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    UTS corfin 2 genap 19-20-MNJ43

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    The document is a mid-term exam for a Corporate Finance II course consisting of 4 questions. The exam covers topics like: [1] Calculating stock value using the dividend discount model. [2] Calculating a company's weighted average cost of capital (WACC). [3] Determining the best financing option between equity and debt given different levels of earnings before interest and taxes (EBIT). [4] Determining the effect on a company's equity accounts of declaring a 15% stock dividend. The exam is 120 minutes long and candidates are only permitted to use a non-programmable calculator.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    26 views2 pages

    Opened Book: Corporate Finance Ii MNJ206 / MNJ43

    Uploaded by

    Fortuna Ragil Kumala
    The document is a mid-term exam for a Corporate Finance II course consisting of 4 questions. The exam covers topics like: [1] Calculating stock value using the dividend discount model. [2] Calculating a company's weighted average cost of capital (WACC). [3] Determining the best financing option between equity and debt given different levels of earnings before interest and taxes (EBIT). [4] Determining the effect on a company's equity accounts of declaring a 15% stock dividend. The exam is 120 minutes long and candidates are only permitted to use a non-programmable calculator.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    OPENED BOOK

    MID-TERM EXAMINATION
    CORPORATE FINANCE II
    MNJ206 / MNJ43

    Session: Semester 2 – AY 2019/2020 Date: 17 April 2020

    Faculty: Economic and Social Science Duration: 120 minutes


    Permitted Materials:
    Study Program: Management
    Calculator – Non Progammable
    Level of Study: Undergraduate (S1)

    INSTRUCTIONS TO CANDIDATES:
    1. Check the following exam paper information:
    Exam paper:
     Total number of pages : 2 (including cover pages)
     Attached materials : -
     Total number of sections : 1
     Total number of questions : 4
    Instructions:
    Doing the 4 questions below, and each given a weighting of 25%.

    2. Please write your name and student ID on the exam paper and answer sheets.
    Student Name ……………………………………………..
    Student ID ……………………………………………..

    3. Candidates may use this exam paper to write notes as necessary, but should not remove
    it from the examination venue for any reason.

    4. Any form of cheating or attempt to cheat is a serious offence leading to dismissal.


    Mid-Term Examination – Semester 2/ AY 2019/2020

    1. Thomas Brothers is expected to pay a $0.50 per share dividend at the end of the year.
    The dividend is expected to grow at a constant rate of 7 percent a year. The required
    rate of return on the stock is 15 percent. What is the value per share of the company’s
    stock?

    2. Chemical Biotech Ltd. has a market value of its debts of $400 millions with 8% cost of
    debt. Currently, there are 10 million shares outstanding, each traded at $60. If the
    company has an 10% tax rate, the risk-free rate is 4% and the expected return on the
    market portfolio is 12%, calculate the Weighted Average Cost of Capital (WACC). Note
    that Chemical Biotech Ltd. Has a market risk of 1.1 (beta).

    3. Our firm has 800,000 shares of common stock outstanding, no debt, and a marginal tax
    rate of 40%. We need $6,000,000 to finance a proposed project. We are considering
    two options. First option issue 200,000 shares of common stock at $30 per share, or
    second option to borrow $6,000,000 by issuing 10% bonds.
    a. If EBIT is $2,000,000, which option is best?
    b. If EBIT is $4,000,000, which option is best?
    c. What is the break-even EBIT?

    4. The company with the common equity accounts shown here has declared a 15% stock
    dividend when the market value of its stock is $35 per share. What effect on the equity
    accounts will the distribution of the stock dividend have?

    Accounts Amount ($)


    Common stock ($1 par value) 406,000
    Capital surplus 1,340,000
    Retained Earning 3,427,000
    Total owners’ equity 5,173,000

    ---------- end of exam paper ---------

    Corporate Finance II Page 2 of 2

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