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Finance Test Paper

Here is a 300-500 word essay on the importance of financial planning: Financial planning is crucial for both individuals and businesses to achieve their financial goals and secure their long-term financial well-being. Proper financial planning allows one to analyze their current financial situation, set goals for the future, and develop a strategy to achieve those goals (Investopedia, 2022). There are several key reasons why financial planning is important. First, it helps one understand their complete financial picture by taking stock of income, expenses, savings, debts, insurance coverage, and assets. This provides clarity on where money is coming from and going each month. Financial planning also aids in budgeting and prioritizing spending to ensure needs are met before

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Suryansh Srivastava Fitness
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128 views

Finance Test Paper

Here is a 300-500 word essay on the importance of financial planning: Financial planning is crucial for both individuals and businesses to achieve their financial goals and secure their long-term financial well-being. Proper financial planning allows one to analyze their current financial situation, set goals for the future, and develop a strategy to achieve those goals (Investopedia, 2022). There are several key reasons why financial planning is important. First, it helps one understand their complete financial picture by taking stock of income, expenses, savings, debts, insurance coverage, and assets. This provides clarity on where money is coming from and going each month. Financial planning also aids in budgeting and prioritizing spending to ensure needs are met before

Uploaded by

Suryansh Srivastava Fitness
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

Time:3.

5 hours

Finance test
Please kindly read the following requirement list before you start working.

1. Please put your answers to Part A Q1 and Part B in a word document. Use “your full
name + Part AB” to name the file.
2. For Part A, 10 multiple choice questions are given. You need to attempt all.
3. For the Part B essay question, whenever you quote online sources, please paraphrase it. If
you copy and paste directly, it will be considered plagiarism and you will be rejected
directly. You are encouraged to give your personal opinion and analysis here.
Part A (MCQ)
Q1. Calculate beta of Robil Corporation using the following details given in the table below.

Food Casino Franchise


Weights 0.515 0.152 0.333
Market Value $m 170 50 110
Levered Beta 0.9 1.15 2.064
Average Debt/Equity Ratio 0.4 0.3 1.2

a. 1.34
b. 1.22
c. 1.33
d. 1.42
e. 2.01

Q2 Ayushi wants to buy a vehicle for her mother’s 50th birthday. She borrowed $160,000 and it
is to be paid off in installments (monthly) over 12 years at 6 percent annual interest compounded
monthly. Calculate the amount of each installment.

a. $1561
b. $1632
c. $1563
d. $1615
e. $1515

Q3 Mani Corp. issued a 10-year, $100 face value 16 percent semi-annual coupon bond. The bond
is valued at $90, which of the below statements are true?

a. YTM is less than coupon.


b. The bond is zero coupon bond.
c. YTM = 8%
d. Bond is trading at a premium price
e. Bond is trading at a discounted price
Q4 Ranveer Ltd. issued a $100 par value, 8%, semi-annual, 30-year debenture bond. The bond is
presently trading for $120. Calculate the current yield of bond.

a. 6.67%
b. 3.27%
c. 3.24%
d. 6.63%
e. 6.60%

Q5 Calculate terminal value of Tanu Ltd, assuming a terminal growth rate of 3%. The other
details are; FCF of nth year is $300m and cost of capital is 8%.

a. $6280
b. $6380
c. $6180
d. $6820
e. $6810

Q6 Jisha Ltd. just paid a $1.5 dividend, stock of Jisha Ltd is trading at a market price of $25 and
a growth of 4 percent is expected. Calculate the required rate of return.

a. 10.00%
b. 10.69%
c. 10.24%
d. 12.34%
e. 11.11%

Q7 Calculate the present value of Annuity due; when the amount due is $2500, rate is 5%
compounding semiannually and time to maturity is 20.

a. $66,865.73
b. $64,325.86
c. $62,815.76
d. $69,854.77
e. $68,855.71
Q8 Ramchandra Corp. has issued a bond which is currently trading at a $ value of 1200 and with
the following features; yearly coupon payments with a coupon rate 4 percent, face value of
$1,000, YTM of 2.1% and has a current yield of 3.33%. Calculate the number of years to
maturity?

a. 14 years
b. 12 years
c. 16 years
d. 13 years
e. 15 years

Q9 What would be the weighted average cost of capital with the following details; cost of equity
is 10%, pretax cost of debt is 15%, tax rate is 30%, and cost of preference shares is 5%? It has
been also noticed that the company maintains a 50-50 percent of debt and equity capital
structure.

a. 10.20%
b. 12.25%
c. 10.25%
d. 11.20%
e. 12.30%

Q10 Calculate return on capital when earnings before interest and after tax is 60% of earnings
before interest and tax. The data given is EBIT $200m and $600m invested capital.

a. 10%
b. 20%
c. 30%
d. 22%
e. 40%
Part B (Essay Question)
Comment on the importance of financial planning.
Instructions:
 Word limit range 300-500 words
 Please use formal writing with paragraph by paragraph (do not write in bullet points)
 Please provide at least 1 reference of APA style using the below link for referencing
formatting: (https://owll.massey.ac.nz/referencing/apa-style.php)
 You cannot copy and paste directly from online sources because we will not accept work
with above 20% similarity

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