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A company is currently paying a dividend of INR 5 per share. The dividend is expected to grow
at a 15 percent rate for three years, then at 10 percent rate for the next three years, after which it is
expected to grow at a 5 percent rate forever. What is the Present Value of the share if the capitalization
rate is 9 percent?
I. True/False/Uncertain - Briefly explain
1. GMSE is bigger with more Xs than the true model than with less Xs.
2. If the exit criterion sls in automatic search is elevated, then the model ends up with less Xs in it.
3. If βˆ = 0.01 in a logit model, then for each unit increase in X, the probability that Y=1 is on average higher by 1%, ceteris paribus.
4. A model with 98% correct classification rate is a useful model.
5. With the cumulative logit, the probability to be in the second highest category K-1 or higher is pK−1 = FK−1 − 1.
6. If the p-value=0.06 of testing Poisson vs. Negative Binomial model with the χ 2 1 distribution, one should use the Poisson model.
7. With all observations in the same cluster, RSQ = 1.
8. With 500 multiple imputation samples generating 500 predictions of 0 or 1 for the binary dependent variable for each observation, to combine the 500 predictions into one for each observation, one has to take the mean of all 500 predictions and use a cutoff of 50%.
The price of cheese rises from $6 to $10 per pound, while the price of coke remains $3 per glass. For a consumer with a constant income of $3,000, show what happens to consumption of coke and cheese
How to compute the fixed cost,total cost,marshalls cost average variable cost,average fixed cost and the average of total cost of farmer banjo..
Suppose you are a monopolist and find that the demand elasticity of your product is different in two markets. What would be your pricing strategy?
XYZ corp expects to earn $4.7 per share next year and plow back 46.81% of its earnings (i.e., it expects to pay out a dividend of $2.5 per share, representing 53.19% of its earnings). The dividends are expected to grow at a constant sustainable growth rate and the stocks are currently priced at $30 per share. How much of the stock's $30 price is reflected in Present Value of Growth Opportunities (PVGO) if the investors' required rate of return is 20%? $_________
(Hicks decomposition) A consumer spends an income of m on two goods x1 and x2. The price of x1 is p1, and the price of x2 is p2. Draw pictures and use the Hicks decomposition to illustrate the income effect and substitution in the following two cases.
(i) Initially, the consumer spends all his money on x2. Show how an increase in p1 affects the consumer’s choice.
(ii) Initially, the consumer purchases both goods. Show how an increase in p1 affects the consumer’s choice of x2 if x2 is inferior goods.
On 3rd December,2021, the new Dawn government and the IMF mission to Zambia reached a staff level agreement on a programme under the IMF's Extended Credit Facility (ECF) that envisages provision of financial support of $1.4bn over the next three (3) years. Taking into account the anticipated IMF conditionalities, What implications will such an agreement have on the general economy outlook of Zambia? To what extent do you approve or disapprove such an agreement.
different between scarcity and shortage
3. When can there arise a conflict between owners’ and managements’ goals? How does wealth maximization goal take care of this conflict?
4. What is agency relationship? Give some examples of potential agency problems between shareholders and managers.
5. Discuss the factors that motivate managers to act in the shareholders interest?
6. What role should the financial manager play in a modern enterprise?
7. Define the scope of financial management.
8. “Investment decision depends on financial decision” – Do you agree with this statement? Why or why not?
9. Why financial assets exist in an economy? Explain different forms of funds in an economy.
10. Why are financial markets essential for healthy economy?
11. Distinguish between primary and secondary markets.
12. “There are three types of market efficiency - strong, semi-strong and weak” – Explain.
13. Write short notes on:
i) Organized market
ii) Odd lot
iii) Third market
