1. A Tk.1000 face value bond has a current market price of Tk.761, an 8% coupon rate and 12 remainin !

ears until maturit! "ith interest paid annuall!. #hat is the implied market determined discount rate$ 2. %etermine the value of a Tk.1000 par value bond "ith a 10% coupon and nine !ears to maturit!. The re&uired rate of return is 12%. '. (ompan! ) presentl! pa!s a dividend of Tk.2 per share on its common stock. The compan! e*pects to increase the dividend at a 10% rate the first five !ears and then ro" the dividend at a 6% rate thereafter. +ou re&uire a 1,% return to invest in this stock. #hat value "ill !ou place on a share of this stock$ ,. -r. ) is considerin a ne" farmin facilit!. .t "ill need to spend Tk./0000 for special e&uipment. The e&uipment has a useful life of four !ears and is in the three !ear propert! class for the ta* purpose. 0hippin and installation e*penditures e&ual Tk.10, 000 and the machiner! has an e*pected final salva e value, four !ears from no", of tk.16,100. 2o additional net "orkin capital is needed. The marketin division envisions that the use of the ne" facilit! "ill enerate additional net operatin revenue cash flo"s as follo"s3
4nd of +ear 1 2et cash Tk.'1,167 5lo"

2 Tk.'6,210

' Tk.11,721

, Tk.'2,218

-ar inal ta* rate is ,0%. 4stimate the pro6ect7s relevant incremental cash flo"s. 1. (ompan! ) is considerin a ne" product line to supplement its line ran e. This ne" product line "ill involve cash

involvement of Tk.1, 00,000 at time 0. After ta* cash inflo"s are as follo"s3
+ear 1 After ta* Tk.',,,'2 cash inflo"s

2 Tk.'/,1'0

' Tk.'/,'1/

, Tk.'2,21/

The re&uired rate of return is 12%. 0hould the compan! o for this ne" product line$ Submission Date: Sec 1 Nov. 3, 2013 Sec 2 Nov. 4, 2013

Assignment will be hand written and submitted individuall