Finance

at Maastricht University

Next exam
JUNE 06
Document type
Semester
Last shared documents
Anonymous User shared last document 21 minutes ago
No area was marked for this question
Could you, just briefly, explain the steps on how to calculate this? Thanks
zoe zwiebelmann
Juliette Roussel
No area was marked for this question
I made a mistake calculating P5 in the first exercise. in the denominator you don't subtract the return on new investment but the long term growth rate! The new current stock price you get is roughly 186.
Yes that's what I said in my comment Marion ;)
Right sorry hah
No area was marked for this question
Thank you so much I was looking for them for hours !!
No area was marked for this question
Anyone has answer key and explanations for this？
Can anybody show me why its B? :-)
You have to find the NPV of the project and equal it to zero but the discount so the bottom part of the fraction is the unknown which is the IRR and you solve for the IRR.
Could you show me the calculation? I know the theory but I don't get to the right solution
No area was marked for this question
How did you calculate the FV of 100?
View 1 more comment
yep i just assumed the FV
You can also calculate it from the previous results
No area was marked for this question
First of all thanks for uploading this!! But i don't understand why you added 0.15 as cost of capital in 4.2.1. In the manual it only says we have to do it for 5.53%, 2,72% and 10.45%?
Yes, that's true. I just added it as an addition to help a friend and forgot to take it out before the upload. So your right, it's not necessary for this exercise.
No area was marked for this question
How do you know that there are two IRRS? Like how do you calculate the opportunity cost of capital?
If you look at the graph in the document next to the text box, you can see that the line actually crosses the horizontal axes 2 times. This means, there are 2 IRRs (where NPV is equal to zero). One between 2,73 and 5,5 and the other one between 5,5, and 10,45. That's how you find the solution to this one. I hope, this was somewhat comprehensive.
Valuation*
No area was marked for this question
There was a mistake in 3.3.2 Financial Investments: you have to add up the dividend payments in the NPV instead of subtracting them. The NPV is then 5,746.71€.
Why do you add the depreciated value to the calculation?
depreciation is not an actual physical expense, it's just a way of measuring how goods lose value over time because of wear. that's why you need to add back the depreciation since you haven't actually paid it.
Ahh makes sense! thank you!
No area was marked for this question
CORRECTION: Operating Income = Gross Profit - Operating Expense!
*operating expenses
that's correct, sorry my mistake
No area was marked for this question
Not sure the "total debt"? I thought like (Total Debt)/(Book value of equity) = - /59,194 =0 ??????
View 1 more comment
thats it :)
You actually dont have to take the current debt into account so its only longterm debt/equity so 2.892/59.194=4.9%
This is actually positive!! no idea why i put the brackets first.. sry
No area was marked for this question
S corporations? C corporations? would be nice if you could elaborate a bit more :)
I could have done that a bit more specifically, that's true
I thought the difference between S corporation and C corporation is about the way to pay taxes. The C corporation pay corporate taxes + personal taxes, so we say it is "double taxation". While, for the S corporation, firm do not need to pay taxes for the themselves, but the employees in the firm needs to pay personal taxes. Hope my understanding is correct, if not please correct me ;) good luck with study~
market makers match stock buyers and stock sellers
NYSE and NASDAQ used to be responsible for over 75% of all stock trades in the U.S.
In general, rising stock prices are in the interest of every shareholder. So this can be considered as the ultimate goal of every corporation.
Can someone post the course manual please?
View 1 more comment
the supply chain management course manual is up
You can find it on the student portal!
What do you mean by everyday obligations?
Payments that the organization can encounter on an every-day basis, for example paying the rent.
Can someone elaborate on dark pool? Don't really know that is.
does someone know the difference between CML and SML? or in particular about Q56 first sit 2017. Why is this answer wrong "The straight line that connects all possible combinations of expected return and std. dev for all possible portfolios consisting of the stock and the savings account is the CML" ?
The CML is the capital market line. It is the line that shows all possible combinations between the MARKET portfolio and risk-free assets like bonds or savings accounts. It has the highest sharp ration, implying that it gains the most excess return per unit of risk. However the SML (security market line) is the graphical representation of the CAPM, thus being a regression showing how much expected return a stock should get based on its sensitivity/beta.
thanks a lot!
Q&A: Any problems or questions while studying Finance? Don't worry, we got your back! Just post any of your questions in the finance course on Studydrive https://www.studydrive.net/courses/maastricht-university/finance/222 and our experienced tutors will help you! Much success with your exams Your Success Formula Team
Q20 of 2017 first sit?
This is a screenshot from the succes formula crash course, could anyone help me with the calculations?
View 1 more comment
Thank you so much!
You are very welcome!
View 1 more comment
30.) The coupon bond pays a coupon of 5%, clearly lower than the yield to maturity of 10,4%. This implies that the bond is sold at discount. Cash inflows are coupon payments of 50 (take coupon rate * Face Value / # payments per year) and the Face Value We get 50 each year for 5 years, and 1000 at year 5, thus we can use the annuity formual for the 50\$ each year: 50/0.104*(1-1/1.104^5)+1000/1.104^5 = 797.37 Closest to 750 ANSWER D
34.) To find the Stock price after the dividend drop to 1.50\$, we need to find the cost of equity based on the prior years stock price and dividend payment: Use the dividend discount model for infinite growth ( dividend/(cost of equity - growth rate) 2,5/(X - 0.04) = 25 ---> X = 0.14 Thus, 1,5/(0,14 - 0,08) = 25\$ ANSWER B
How do you calculate Q13,Q20 and Q25?
25.) Profitability Index = PV( cash inflow)/ PV (cash outflow) Thus PV( Cash inflow) --> 4000/0,15 * (1 - 1/1,15^4) = 11.419 PV(Cas outflow) --> 10.000 PI = 11.419/10.000 = 1.14 --> 14% is the profitability of the project over its initial investment ( 14% is the percentage change ) ANSWER A
13.) You need to apply the APR to EAR transformation, since the EAR incorporates the compounding effect. calculation: investment i. --> 20.000 * 1,07^5 = 28.051 investment ii. --> 20.000 * ((1+ 0,07/2)^2)^5 = 28.211 ---> EAR is calculated by taking (1 + APR/k)^k where k is the number of payments per anno investment iii. --> 20.000 * (e^0.07)^5 = 28.381 ---> for continuous interest we need to take e^interest rate ANSWER C
Anybody who knows how to calculate Q22 of the first sit of 2017 version U?
View 1 more comment
Thank you so much!
You are so welcome!
Does anybody know how to calculate Q45 of the first sit of 2017? Thanks! :)
View 1 more comment
thank you!
You´re welcome!
How do you calculate Q13 and Q18?
View 1 more comment
18.) Here you need to know three formulas : the dividend yield, the capital gain and the total return. Further they tell us that the rental yield is calculated one on one like the dividend yield, so the rent of 150.000 is treated like a dividend. dividend yield = dividend/price in year 0 capital gain = (price in year 1 - price in year 0) / price in year 0 ---> just a percentage change calculation total return = dividend yield + capital gain Calculation: 150.000/2.000.000 = 0.075 (1.175.000 - 2-000-000) / 2.000.000 = -0.4125 0.075 -0.4125 = -0.3375 ANSWER A
How do you calculate Q14 & Q17 of the first sit of 2017?
No worries :) thats what we are here for!
Nice & keep it up ;)
Does someone know how to calculate Q45 of the first sit of 2017? I get 7% every time but its not right
For this exercise we need the WACC, to find the cost of debt. To remember, the WACC uses the firms financial distribution of debt and equity as weights for the cost of equity and cost of debt. Calculation: E/(E+D) * cost of equity + D/(E+D) * cost of debt * (1-tax rate) = Rwacc 280/(280+93) * 0.09 + 93/(280+93) * X * (1 - 0.6) = 0.073 Solve for X --> 93/(280 + 93) * X * 0.6 = 0,073 - 280/(280+93) *0.09 -----> 93/(280 + 93) * X * 0.6 = 0.00616 93/(280 + 93) * X = 0.00616 / 0,6 ----> 93/(280 + 93) * X = 0,0103 X = 0,0103 / 93/(280 + 93) -----> X= 0,041 cost of debt is around 4% ANSWER A
Does someone know how to calculate Q35 of the first sit of 2017? Thanks in advance ;)
View 1 more comment
why don't you have to take 7/(1,12)^2 since its two years?
As explained above, the perpetuity that we use to derive at 7\$, is discounting one year only! Thus we have 7\$ share price in year 1 not year 2.
Could anyone explain why the awnser to Q43 is A and not C in the first sit of 2017?
The idea behind this question is to show you the effect of diversification. To understand it, you need to know that if stocks move together they will exhibit a positive correlation (if they move 1:1, thus identically they have a correlation of 1). If the stock have a high correlation, the effect of diversification will be very small, leading to almost no decrease in risk. Since the variance is used to measure risk (square root of variance is the volatility ---> risk), the variance will be very high for two a two stock portfolio with highly correlated stocks, since we do not diversify greatly. We can conclude: with more movement together comes high correlation and thus a bigger variance
Can someone explain me how to calculate Q24 of the first sit of 2017?
You start with -100, in year one you get +40 and in year 2 you get +50. so combined thats +90, you still need 10 to be fully re-paid. In year 3 your cash flow is 60 , 60/12 = 5 so you need two months to get the 10 in order to have your investment back. With the payback rule you do not need to take any kind of rate into account so the best anwser is 2.2 years.
For this exercise you need to find the time period it takes for the project to payback its initial investment. Thus we want to know how long it take to have our cash inflows being equal to our cash outflow of 100. Calculation: After year 1: 40 \$ of cash inflow --> we still need 60 more to break even After year 2: 90 \$ of cash inflow --> we still need 10 more Thus we need 10 more dollars from the total cash flows of year 3, to have paid back. This means we need only 10 out of 60 dollars. Considering that we will get 60 over a year, therefore 10 dollars every 2 months, we need to transform months into years: 2/12 (every 2 months 10 dollars, thus we only need 2 more month to break even) ---> simplify ---> 1/6----> 0,167 We can conclude: It takes 2 years and 2 months to pay back, which is the same as 2,167 years --> closest to 2,2 ANSWER D
anyone knows when the grades should be online?
max. 15 working days (as usual)
people doing the assignment do you know where to post it? I can't find the safe assign on the Student portal
He send an e-mail saying you must send it to the regular e-mail address
Is there a difference between the free cash flow method and the discounted free cash flow method or is it the same? they ask in the course assignment to use the free cash flow method to value a company and its stock price, which one should I use?
View 1 more comment
ok thank you very much anonymous vigilante <3
FCF gives you the yearly cash flows. DCF is discounting them to a present value of the enterprise. Subtract the debt and add the cash to enterprise value, and you have the market value. Divide by shares outstanding gives you share price.
any complaints for the exam?
agree on 16 but someone needs to file a complaint for all those 4
16 and 21 probably not....
concerning question 33, why should be the stock market be greater than the bond market ? Google tells me different
I don't have a book btw so I don't know if its just a typo of yours
Which of the following statements related to bonds is false? C) Bond markets within a given country (corporate and government bonds together) are typically smaller ( should be bigger ) in size and volume than stock markets within that same country. so answer key seems false
Could someone show me the calculation for 55% question 38
In my eyes the question or answer was wrong. Given the face value of 1000\$ and the coupon rate of 6% the coupon payment would be 60\$ which then represents a return of (60/20)= 300%. The capital gain was ((25-20)/20)= 25% so together the total return would be 325%. If you‘d take instead of 1000\$ one hundred dollar you‘d get to a total return of 55%. Hence, the question/ answer key is flawed
I think so as well, I don't know which retard is down voting this
Can someone explain to me in version F, question 38, why C isn't also a correct answer? I think there was a mistake in the question and the Face Value should be 100 but I'm not sure if I'm missing anything. Thanks!
View 1 more comment
And we're supposed to say which option is false. So option C, which says that total return is 55% is also false, and thus a correct answer. So we have 2 correct options here, right?
Yes C should be a correct option as well because it is false
Can someone who went to the first-sit upload the exam (can not access studentportal)?
View 1 more comment
Done!
hey guys, how about creating a "International Business 2019" course thing on here that we could all join and use as a permanent, general question board?
Hi, this is Philipp from Studydrive. We will introduce groups next week and will open an "International Business 2019" group for you! So be patient for a few more days and good luck with your last exam ;)
For those who have the exam today, I ate a ton of beans yesterday night so sorry in advance.
i'm looking for the spreadsheet of exercise 6.3. I would be forever grateful
thanks man <3
are the guest lectures exam relevant?
no
The guest lecturer aren't, but the other ones are really good summaries to see what he wants you to know
Does anybody have the calculation to question 19 from the trial exam?
Thanks ;)
983 documents in this course
0
0
2
Description
Summer 2018
-
Assignments
0
0
1
Description
Summer 2018
-
Summaries
0
0
33
Description
Summer 2017
-
Exams
0
0
31
Description
Summer 2018
-
Assignments
0
0
13
Description
Summer 2018
-
Assignments
0
0
83
Description
Summer 2018
-
Assignments
+ 1
0
67
Description
Summer 2018
-
Assignments
0
0
58
Description
Summer 2018
-
Summaries
0
0
99
Description
Summer 2018
-
Summaries
+ 1
0
19
Description
Summer 2018
-
Summaries
- 3
0
147
Description
Winter 2017/18
-
Assignments
+ 3
1
282
Description
Summer 2018
-
Assignments
0
0
67
Description
Winter 2017/18
-
Summaries
+ 3
0
60
Description
Summer 2018
-
Assignments
0
0
16
Description
Summer 2018
Stefan Straetmans
Assignments
- 1
0
42
Description
Summer 2018
-
Summaries
0
0
141
Description
Summer 2018
-
Assignments
0
0
41
Description
Winter 2017/18
-
Summaries
- 1
0
37
Description
Winter 2017/18
-
Assignments
0
0
9
Description
Summer 2018
-
Summaries
0
0
2
Description
Summer 2018
-
Summaries
+ 1
0
122
Description
Summer 2018
-
Assignments
+ 1
0
131
Description
Summer 2018
-
Summaries
0
0
41
Description
Summer 2018
-
Summaries
+ 1
0
61
Description
Winter 2017/18
-
Assignments
0
0
52
Description
Summer 2018
-
Summaries
0
0
119
Description
Winter 2017/18
-
Assignments
+ 2
1
47
Description
Summer 2018
-
Exams
+ 1
0
57
Description
Summer 2018
-
Exams
0
0
33
Description
Summer 2018
-
Exams
0
0
35
Description
Summer 2018
-
Exams
+ 1
0
110
Description
Summer 2018
-
Assignments
0
0
21
Description
Summer 2018
-
Summaries
0
0
50
Description
Summer 2018
-
Summaries
+ 2
0
86
Description
Summer 2018
-
Summaries
+ 1
0
149
Description
Summer 2018
-
Assignments
+ 1
0
118
Description
Summer 2018
-
Assignments
+ 3
0
39
Description
Summer 2018
-
Summaries
+ 1
0
35
Description
Summer 2018
Stefan Straetmans
Summaries
0
0
20
Description
Winter 2017/18
-
Summaries
- 1
1
268
Description
Summer 2018
-
Assignments
+ 1
0
158
Description
Summer 2018
-
Assignments
- 1
0
93
Description
Summer 2018
-
Assignments
0
0
62
Description
Summer 2018
-
Assignments
- 3
0
64
Description
Summer 2018
-
Assignments
0
0
27
Description
Summer 2018
-
Exams
0
0
93
Description
Summer 2018
-
Summaries
0
0
4
Description
Winter 2017/18
-
Summaries
+ 1
0
27
Description
Winter 2017/18
-
Assignments
+ 1
0
179
Description
Summer 2018
-
Summaries
0
0
23
Description
Summer 2018
-
Summaries
+ 6
0
234
Description
Summer 2018
-
Assignments
+ 1
0
70
Description
Summer 2018
-
Exams
+ 3
0
189
Description
Summer 2018
-
Assignments
0
0
50
Description
Summer 2018
-
Summaries
+ 1
0
34
Description
Summer 2018
Stefan Straetmans
Summaries
0
0
33
Description
Summer 2018
-
Summaries
0
0
35
Description
Summer 2018
-
Summaries
+ 3
0
101
Description
Summer 2018
-
Assignments