Tuesday, January 4, 2011

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Any body can help me in its solution till the next night 10:00 pm

       "Investment Analysis & Portfolio Management" (Fin 630)

Assignment No.02                                                                  Marks:     20

In order to analyze the performance of ABC Company, following information has been
extracted from its financial statements.

                          Particular                    Rs. (000)
                          Net profit after tax             500
                          Total assets                    8000
                          Common stock                    1000
                          100,000@ Rs. 10
                          Retained earning                 90
                          Current liabilities              25
                          Account receivables              50
                          Cost of goods sold              1800
                                        Long term debt
                          Bond A                           300
                          300@ Rs.1000
                          Bond B                           200
                          200@ Rs.1000

   1. You are required to calculate the following ratios:

    • ROA (Return on assets)
    • ROE (Return on Equity)
    • EPS    (Earning per share)

   2. Calculate the value of bond A using 15% coupon with 20-year maturity, paying 40
       semiannual payments of Rs. 75 each, assuming required rate of return of 10%

   3. Calculate the value of bond B using 11% coupon with 10-year maturity, paying 40
       quarterly payments of Rs. 27.5 each, assuming required rate of return of 16%

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