MGT201 VU Midterm Papers Spring May 2012

Total 32 Questions
28 MCQ of 1 Marks (Mixed old n new)
2 Questions of 3 Marks
2 Questions of 5 Marks

3 Marks:

Suppose ABC Company is given Rs. 3 as dividend which to grow at constant rate of 9% per year from now on. What would be thestock price of company if the required rate return is 17%?

3 Marks:
Suppose ABC Company preffered stock is sold for Rs. 30 withdividend of Rs. 5. What would be price of the preffered strock of infinite lifeif required rate of return is 14%?

5 Marks:
Suppose Govt. pay coupon on its bond quarterly; calculate the intrinsic value of bond under following circumstances:

10 Year bond with 10% coupon rate is selling at Rs. 1050face value of bond is Rs. 1000.

Required rate of return is 12%.

5 Marks:
ABC Company common stock was as under:

Economic Condition Probability of occurrence Possible return
Boom 70 65
Recession 30 35


You are required to compute the following:
A- Expectedvalue of Return
B- StandardDeviation of Return