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Uncle Akeju is 65 years of age and has a life expectancy of 12 years. He wishes to invest N20,000 in an annuity that will make a level payment at the end of each year until his death. If the Interest rate is 8 percent, what income can uncle Akeju expect to receive each year
Mr. Agunton is planning for her retirement. He is 30 years old today and would like to have N500,000 when he turns 55, he estimates that he will be able to earn 8 percent rate of return on her retirements over time; he wants to set aside a constant amount of money every year (at the end of the year to help achieve his objective. How much money did Agunfon invest at the end of each of the next 25 years to realize his goal of N500,000 at the end
John Anderson wants to save for his daughter’s college tuition. He will have to pay Rs. 50,000 at the end of each year for the four years that her daughter attends college. He has 8 years until his daughter starts college to save up for her tuition. Using a 7% interest rate compounded annually, the amount Anderson would have to save each year for 8 years is closest to:
The organization structure of a Bank’s Treasury unit involves designing of its operations across Front office, Mid-office, and Back office. Describe each of these three operating arms in terms of its nature, purpose / objectives, and the skills / qualifications of the people employed in these 3 operating arms
Historically, only larger Banks had the strength of providing Treasury products & services. Now even smaller banks are into it in a strong way. Enumerate and describe at least 5 purposes for which a Bank Treasury exists
Discuss the benefits and drawbacks of commercial papers as an investment vehicle
Common stock : The firm's common stock is selling at RM 60. The floatation cost is 3 percent of selling price. At present, the company's growth rate is 5 percent and the latest dividend paid was RM 0.90. Calculate the cost of each alternative if the company is in a 40 percent tax bracket
Assume today is 31 December 2021. Firm A, a commodity producer, is expected to adopt the following payout policy for the next 4 years:
Year
2022
2023
2024
2025
Dividends
($’ m)
9
12
5
0
The estimated net profit after tax is $50 million for the year 2025. The company has no preference share financing, and does not plan to do so for the next 4 years. The expected price-earnings ratio by the end of year 2025 is 15 times. Shareholders of Firm A require a return of 10 percent for shares in this risk class.
Required
a. Compute the intrinsic value of Firm A’s common shares.
b. Critically evaluate the use of the Dividend Discount Model in valuing the shares of Firm A, and explain which alternative methods may be more appropriate
Mr. Akbar provides you with the following information-(all the transactions are separate and independent of each other) Started business with cash Rs150000 Purchased goods for cash Rs 25000 Sold goods to C on credit Rs 20000 Paid salary for cash Rs15000 Deposited cash into the bank account Rs100000
a. Identify the accounts being affected in the monetary transaction and Identify the type of accounts identified - real, personal or nominal (5 Marks) b. Discuss the rule of passing the journal entry applicable here and pass the journal entry (Golden rule or transaction analysis, any of these rule/s can be taken as a base to justify the answer)
Calculate the return as per CAPM for following company's stock,Returns of T- Bill is 7%.
Stock ,Expected Return ,Beta
Tata 21% 1.7
Adani Power 16% 1.4
Ranbaxy 23% 1.1
PNB 19% 1.2
Sensex 18%
