Q no 1 Market rate of return is 15%, beta is 1.20 and required rate...

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Finance

Q no 1 Market rate of return is 15%, beta is 1.20 and required rate of return is 16%. What is risk free rate of return?

Q no 2 Firm purchased plant Rs. 250,000; foundation cost paid 15,000 and installation charges Rs. 38,000. The projected sales of the company for the first year is 400,000 and this sales will grow by 5% per annum for next five years. However, Companys EBIT would be near 15% of sales and Interest expense 5% of sales. Corporate tax rate is at 30% and Cost of capital 15%. Calculate Modified Internal Rate of Return (MIRR). Q no 3 Firm purchased plant Rs. 250,000; foundation cost paid 15,000 and installation charges Rs. 38,000. The projected sales of the company for the first year is 400,000 and this sales will grow by 5% per annum for next five years. However, Companys EBIT would be near 15% of sales and Interest expense 5% of sales. Corporate tax rate is at 30% and Cost of capital 15%. Calculate Profitability Index (PI).

Q no 4 A share of stock with a beta of 1.20 now sells for 55. Investors expect the stock to pay a year-end dividend of 2.90. The T-bill rate is 7 percent, and the market risk premium is 8 percent. If the stock is perceived to be fairly priced today, What must be investors expectations of the price of the stock at the end of the year?

Q no 5 Firm purchased plant Rs. 250,000; foundation cost paid 15,000 and installation charges Rs. 38,000. The projected sales of the company for the first year is 400,000 and this sales will grow by 5% per annum for next five years. However, Companys EBIT would be near 15% of sales and Interest expense 5% of sales. Corporate tax rate is at 30% and Cost of capital 15%. Calculate Internal Rate of Return (IRR)?

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