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MGT201 final ppr by  John Braganza 

If you feel the following has helped you.  Do help others!

 

Objectives

 

ABC’s and XYZ’s debt-to -total assets ratio is 0.4. What is its debt-to-equity

ratio?

0 .2

0 .77

0.667

0.333

A 5-year ordinary annuity has a future value of Rs.1,000. If the interest rate is

8 percent, the amount of each annuity payment is closest to which of the following?

Rs.231.91

Rs.184.08

Rs.181.62

Rs.170.44

Managers prefer IRR over net present value because they evaluate investments:

In terms of dollars

In terms of Percentages

Intuitively

Logically

The ABC Company relies on preferred stock, bonds, and common stock for its long term financing. Rank in ascending order (i.e., 1 = lowest, while 3 = highest) the likely after-tax component costs of the ABC's long-term financing.

1 = bonds; 2 = common stock; 3 = preferred stock

1 = bonds; 2 = preferred stock; 3 = common stock

1 = common stock; 2 = preferred stock; 3 = bonds

1 = preferred stock; 2 = common stock; 3 = bonds

What would be the result when there is an increase in the number of shares Outstanding by reducing the par value of stock? (similar, tricky question, options were same)

Stock split

Stock dividend

Extra dividend

Regular dividend

Q. Above the CML line (risk and return?)

Q. Stock X beta of 1.5.  The risk free rate is 10% and the expected market return is 14%.

Find the expected return on stock X

 

 

 

Subjectives

5 Marks

Q.      Levered       Un-levered

EBIT           3000           3000

Interest rate 10%

Find out the return on equity

 

Q. Business risk

 

Q. Calculate Spot rate.  Given: Forward rate, etc.

 

Q. Stock X and Y has a beta of 1.5.  The risk free rate is 10% and the expected market return is 14% and 16% respectively.

Find the expected return on stock X

Find the expected return on stock Y

A stock has a beta of 1.5 and the risk free rate is 10%. What is the expected return on the stock in each of the following cases?

a)      The expected return on the market is 14%?

b)      The expected return on the market is 16%?

 

Solution example:

a. rM = 18%

rRF = 10%

_ = 0.5

r = rRF + ( rM + rRF ) _

= 10% + (18%-10%) 0.5

= 10% + 4%

= 14%

b. rM = 18%

rRF = 10%

_ = 1.00

r = rRF + ( rM + rRF ) _

= 10% + (18%-10%) 1.00

= 10% + 8%

= 18%

Q. Liquidity

 

Q. Capital Management - Lean and Mean

 

Q. Difference between Operating lease and financial lease.

Q. Stock re-purchase impact?

Q.

Answer:

– High Current Assets means High Liquidity but Low Profitability. This is due to more

money tied in current assets that have low profitability.

– Low Current Assets means High Profitability but High Risk. This is due to money tied

in fixed assets may not be available for payments as they come due.

– High Long-term Debt means Low Risk of illiquidity but High Cost of Debt in form of

interest.

– High Current Liabilities (or short-term Spontaneous Financing like Trade Debt) means

Low Cost but High Risk of illiquidity.

 

My today's MGT201 paper:

Total QS: 50

Total MCQs: 40

Total Marks: 80

The subjective questions are as follows:

1. what are the costs and benefits of holding cash and inventory

2. what is kereitsu in Japan.

3. find a) beta of stock b) return on stock

4. what is long term financing; discuss factors

5. what are the advantages of financial lease from lessee's point of view

6. what is the impact of being highly leveraged on firm

7. find BEP in units and in rupee sales (3 related parts)

8. some data was given; a) find retention ratio, b) comment on payout ratio c) impact of dividend payout on book value per share

9. interpret through your understanding these independent conditions: IRR>SML, IRR>WACC>SML, IRR<WACC<SML and IRR<SML

10. what is the best dividend policy for a firm.

Hope it will help those who still have to attempt MG201 paper...

Regards...

thanks all

Thanks for sharing

mcq past sy ay thy kya :)

My Paper!

Difference between Spot rate and Forward Exchange rate?

Stock re-purchase impact?

Related SML?

WAAC Related MCQs

Totally Forget the remaining!

mcq kahn sy ay thy past sy ay thy kya :)

Two questions I remember

1.  Differentiate between Operating merger and financial merger.

2. Values of Fixed Cost (FC), Variable Cost (VC), and sales were given

    Find out the breakeven units?

mcqs file hai kisi kay pas to plz send ker do

MCQS ziada tr kaha sy aye??? please share your views

ppr was too difficult.. mostly questions were like find out WACCu WACCL I was totally confuse which formulas can be use to solve those particular questions just because of too much length of the questions !!

Guys please upload the current papers. JazakALLAH...

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