Financial Management Q1

You borrowed Rs. 5 million to buy a car and want to pay it within the next 5 years. The first payment will be made at the end of the year. If the annual interest rate is 12%, what should be your annual payment?

• Rs. 787,048.66

• Rs. 1,387,048.66

• Rs. 1,802,388.10

• Rs. 2,837,134.28

David collected his EPF of Rs. 1,200,000 after retirement and wishes to invest the money and double the amount by the end of the next 10 years. What annual interest rate must he earn to reach the expected amount?

• 4.14%

• 9.33%

• 7.18%

• 5.5%

A bond that matures in 30 years has a par value of Rs. 10,000 and a semi-annual coupon of 10%. If you require a return of 14% from this bond, how much are you willing to pay for it?

• Rs. 3,501.33

• Rs. 7,019.59

• Rs. 7,192.16

• Rs. 3,697.60

Royal PLC paid Rs. 2.00 dividend per ordinary share this year. The company expects a constant growth rate in dividends, with the next dividend per share, payable in one year to be Rs. 2.15. If your expected rate of return is 16%, calculate the maximum price you are willing to pay for the share.

• Rs. 25.29

• Rs. 23.53

• Rs. 21.50

• Rs. 26.42

You are purchasing a zero-coupon bond with a face value of Rs. 1,000,000, which will mature in 5 years. The bond is currently priced at Rs. 680,583.10. Calculate the yield to maturity (YTM) using the approximation equation method.

• 7.0%

• 6.7%

• 7.6%

• 9.1%