Manajemen Keuangan Lanjutan

Latihan UTS:

CHAPTER 4
HAL 122

1. First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second City
Bank pays 7.5 percent interest compounded annually. If you made a $7,000 deposit in each bank, how
much more money would you earn from your Second City Bank account at the end of 10 years?
(Example 4.3)

CHAPTER 5

11. NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas
Recreation Corporation (BRC). Both projects require an annual return of 14 percent.

As a financial analyst for BRC, you are asked the following questions:

1. If your decision rule is to accept the project with the greater IRR, which project should you
choose?

If your decision rule is to accept the project with the greater IRR, you should choose

2. Because you are fully aware of the IRR rule’s scale problem, you calculate the incremental IRR
for the cash flows. Based on your computation, which project should you choose?

Based on the incremental IRR computations, you should select New Submission Ride as the
incremental IRR is greater than the required rate of return 14.78785% > 14%.

3. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it
consistent with the incremental IRR rule?

The NPV approach requires us to pick the project with the highest positive NPV amount you
should choose New Submission Ride. The results by the NPV method is consistent with the
incremental IRR rule.

Hal 142 - 143 IRR ; HAL 151 INCREMENTAL IRR ; HAL 136 NPV

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12. Problems with Profitability Index The Cori’s Sausage Corporation is trying to choose between the
following two mutually exclusive design projects:
 1. If the required return is 10 percent and the company applies the profitability index decision rule,
which project should the firm accept?

Since the profitability index of project II is higher, the same shall be accepted

2. If the company applies the NPV decision rule, which project should it take?

Since the NPV of project I is greater than the NPV of project II, the project I shall be accepted

3. Explain why your answers in (a) and (b) are different.

YES ANSWERS ARE DIFFERENT due to fact that cash flows in P1 is higher than in P2

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Hal 155 PI

Chapter 8

5.Valuing Bonds Even though most corporate bonds in the United States make coupon payments
semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company
issues a bond with a par value of €1,000, 15 years to maturity, and a coupon rate of 4.5 percent paid
annually. If the yield to maturity is 3.9 percent, what is the current price of the bond?

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HAL 244

6. Bond Yields A Japanese company has a bond outstanding that sells for 106 percent of its ¥100,000 par
value. The bond has a coupon rate of 2.8 percent paid annually and matures in 21 years. What is the yield to
maturity of this bond?
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7. Zero Coupon Bonds You find a zero coupon bond with a par value of $10,000 and 17 years to maturity.
If the yield to maturity on this bond is 4.9 percent, what is the dollar price of the bond? Assume
semiannual compounding periods.

8. Nonconstant Growth Storico Co. just paid a dividend of $3.40 per share. The company will increase
its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage
points per year until it reaches the industry average of 5 percent dividend growth, after which the
company will keep a constant growth rate forever. If the required return on Storico stock is 13 percent,
what will a share of stock sell for today?

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9. Growth Opportunities The Stambaugh Corporation currently has earnings per share of $8.20. The
company has no growth and pays out all earnings as dividends. It has a new project that will require an
investment of $1.95 per share in one year. The project is only a two-year project, and it will increase
earnings in the two years following the investment by $2.75 and $3.05, respectively. Investors require a
return of 12 percent on Stambaugh stock.
a. What is the value per share of the company’s stock assuming the firm does not under- take the
investment opportunity?
b. If the company does undertake the investment, what is the value per share now?
c. Again, assume the company undertakes the investment. What will the price per share

be four years from today

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10. Covariance and Correlation Based on the following information, calculate the expected return and
standard deviation for each of the following stocks. What are the covariance and correlation between
the returns of the two stocks?

Hal 334

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11. Systematic versus Unsystematic Risk Consider the following information about Stocks I and II:
The market risk premium is 7.5 percent, and the risk-free rate is 4 percent. Which stock has the most
systematic risk? Which one has the most unsystematic risk? Which stock is “riskier”? Explain.

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