Principles of Finance Final Summer 2026 Question Paper

| | | | | | | |---|---|---|---|---|---| | Most Likely | 0.40 | 25 | 0.30 | 26 | | Optimistic | 0.30 | 23 | 0.50 | 25 | **Requirements:** i. Estimate the expected return of both stocks. [CLO 03, L05, Marks:2] ii. Estimate the risk of both stocks. [CLO 03, L05, Marks: 3] iii. As an investor, which stock should you choose? Why? [CLO 03, L05, Marks: 1] **Question 3:** a) Helios Energy Ltd. has just paid an annual dividend of $4.00 per share. The company's dividend is expected to grow at 20% per year for the next two years, after which growth will settle at a constant 10% per year indefinitely. If the required rate of return on the stock is 18%, Estimate the intrinsic value of a share of Helios Energy Ltd. [CLO 03, L05, Marks: 4] b) NCC bank PLC has a Tk. 1000 par value debenture with 12% coupon rate of interest. The debenture has 4 years remaining to its maturity date. If the interest is paid semiannually, Estimate the price of the bond at the required rate of 10%. [CLO 03, L05, Marks: 4] **Question 4:** a) Consider the following information for a lease agreement: Lease term : 4 years Cost of equipment : BDT.20,00,000 Nominal interest rate : 15% Mode of rental payment : Monthly Requirements: i. Estimate the monthly rental in arrears. [CLO 03, L05, Marks: 1.5] ii. Estimate the monthly rental in advance. [CLO 03, L05, Marks: 1.5] iii. Estimate the monthly rental with 8 payments in advance. [CLO 03, L05, Marks: 1] b) Hasib, a 20-year-old college graduate, wishes to retire at age 55. To supplement other sources of retirement income, he can deposit $3,000 each year into a deposit scheme. He will earn a 10% return over the next 35 years. i. If Hasib makes annual end-of-year $3,000 deposits into the deposit scheme, estimate how much will he have accumulated by the end of his fifty-fifth year? [CLO 03, L05, Marks: 2] ii. If Hasib decides to wait until age 35 to begin making annual beginning-of-year $3,000 deposits into the deposit scheme, estimate how much will he have accumulated by age 55? [CLO 03, L05, Marks: 2]