These are corporate finance questions. All multichoice. I’ve given the formula sheets.
FINC3 01-22S2 (C) Page 1 of 5 FINC301 Formulae for Test and Exam Warning: “D” may stand for Dividend or for Debt or Depreciation . From your study you should know the relevant usage. Also, in some instances you may need to manipulate a formula to get what you want. 1 0 S D P rg = − ( ) S RF EQUITY M RFr r r r  = + − 1 0 S D rg P =+ 22 S DivY r CGY =− EBIT TIE interest expense = ( ) 1 D C S DE WACC r t r D E D E = − + ++ 1 bd=− 1 1 NPAT d D N  = ( ) 11 EQUITY UNLEVERAGED FIRM C L D t E   = + −   ( ) 11 EQUITY UNLEVERAGED FIRM C L D t E   = +−  jt MtRR   = + + ( ) 1 1 T tt t CF NPV Outlay r = =− +  NPAT ROE E = NPAT Sales TA ROE Sales TA E =   ( ) %1 COST C PV TV x t =   − SD ED w and w D E D E == ++ 0P PE EPS = NPAT EPS N = ( ) ( ) ( ) ( ) 1 0 1 1 2 0 1 11 1 11 T T TT D D g g rg P rg rr +    ++ −  = − +  − ++  ( ) 1 b ROA IGR b ROA  = − ( ) COUPON MIN GAIN MIN TV r YTM PV YTM − = 1 ln t jt t P R P−  =   1 ln t Mt t Index R Index −  =   ND d NPAT  = ( ) D RF D M RFr r r r  = + − 1 1 NPAT d D N  = End -of-year Examinations, 2020 FINC301 -20S2 (C) Page 2 of 5 ( ) 1 C CFAT EBIT t Depn = − + ( )( ) ( ) 1 CASH C C CFAT Sales Costs t Depn t = − − + ( ) ( ) 1 1 1 1 T BOND T r FV PV C r r  −  +  =+  +  ( ) ( ) 11 11 BOND TT FV PV C r r r r  = − +  ++  ( ) 1 b ROE SGR b ROE  = − ( ) ( ) 11 11 CALLABLE BOND TT Call Price PV C r r r r  = − +  ++  * Dr r IP DRP LP MRP = + + + + ( ) 0 RF ASSET M RF r r r r  = + − ( ) 1 t t tP P E R  − = + + jt MtRR   = + + 1 1 11 ; jt jt tt jt Mt jt t PP INDEX INDEX RR P INDEX − − −− − − == 11 ln ; ln jt t jt Mt jt t P INDEX RR P INDEX −−   ==      ( )( ) 1 1 1 NOM REALr r infl = + + − ( ) 11 L EQUITY C UNLEVERED FIRM D t E  = + − g b ROE= ( ) jt jt jt AR R E R =− LUVV = ( ) 00 SD D r r r r E = + − 0 EPS P NPVGO r =+ ( )( ) 00 1 S C D D r r t r r E  = + − −  ( )( ) 1 EQUITY UNLEVERD FIRM C UNLEVERD FIRM DEBT D r r t r r E = + − − 1 1 0 D DivY P = , ; Tr r T Tr NPV EAC A PVIFA A == EBIT SALES DOL EBIT SALES  =  ( ) 2 , DEBT MARKET Cov Debt Security Market   = D RF D M RF rr rr  − = − ASSETS UNLEVERED FIRM = ( )( ) 1 EQUITY ASSET C ASSET DEBT L D t E      = + − −   ( ) ( ) 1 11 EQUITY C DEBT ASSET C D t E D t E   +− =  +−    *B MAXIMUMOFFER V P N = End -of-year Examinations, 2020 FINC301 -20S2 (C) Page 3 of 5 10 1 0 PP CGY P − = *B B B WITH MERGER V N P = ( ) , 1 1 1 T rT r PVIFA r    − +   =    1 T jt t jt T AR average CAR N = −   =   1 1 NPAT d D N  = ( ) 1 g d ROE=− 11 m NOMr EAR m = + − NPAT ROA TA = ( ) D RF D M RFr r r r  = + − ( ) 0 RF ASSET M RF r r r r  = + − ( ) ( ) ( ) 1 2 3 13 1 1 1 1 J J J JPERIODS to CAR AR AR AR = +  +  + − 1 2 3 13 J J J JPERIODS to CAR AR AR AR = + + ( ) ( ) ( ) 1 1 11 T C t T PROJECT tT t Salvage t NWC CFAT NPV Outlay rr = − +   = + − ++  ( )( ) 00 1 S C D D r r t r r E  = + − −  ( ) 2 , DEBT MARKET Cov Debt Market   = ( ) ( ) ( ) 1 1 CUM EX S CG P P t Dt −− = − ( ) 11 L EQUITY C UNLEVERED D t E  = + − V D E =+ ( ) Jt Jt Jt AR R E R =− ( ) ( ) ( ) %1 C Cost of refunding Value Outstanding x t =   − ( ) S RF L FOREIGN DOMESTICDOMESTIC DOMESTIC r r RP RP  = + + ( ) 0 1 C U EBIT t V r − = ( )( ) ( ) 11 1 1 CS LU D tt V V D t  −− = + −  −  ( ) 1 CD D t r D NPVF Proceeds r − =− U V V NPVF =+ Volatility of Equity Relative Volatility of Equity Volatility of Debt = End -of-year Examinations, 2020 FINC301 -20S2 (C) Page 4 of 5 investment Initial debt of effects Additional ) 1(1 0 − + + =  =t tt r UCF APV L U CV V t D =+       − − + =  = borrowed Amount investment Initial ) 1(1t tS t r LCF FTE investment Initial ) 1(1 − + =  =t t W ACC t W ACC r UCF NPV ( ) 0 0 1 NO MERGER S NO MERGER Dg rg P + =+ AB A BV V V + ( ) ( ) 0 X DUE Y ORDINARY NAL PV CF PVIFA CF PVIFA = =     ( ) 1 1 T tt t CF Synergy r =  = +  ( ) 5 1 0 1 t UNLEVERED t PROJECT t UCF PV r = = +  *BBV V V = +  *B NPV V cash cost =− ( ) * AB A BV V V cash cost = + − () () 1 11 1 DOMESTIC DDDOMESTIC FOREIGN FOREIGN Ei rr Ei  + = + −    +   ‘ ˆ B B s DEBT B B VV P N − = *B B B B P V EPS N E =   ( ) . AB AB AB NPAT NPAT EPS N N Exch ratio + = + ( ) A A MERGER AB A N P NPV P N + = ( ) B B PER SHARE B Premium N Cost P =  − RP Default Spread RelativeVolatility of Equit y = Total E Div NPAT Capital DE Budget     = −    +      NEW BN N Exchange Ratio = AB AB A NEW V P NN = + AB A BV V V Synergy = + + B NPV V Synergy Cost = + − / ˆ ˆ B BA A P Exchange Ratio P = NEW NEW A N X NN = + End -of-year Examinations, 2020 FINC301 -20S2 (C) Page 5 of 5 () () 1 11 1 FOREIGN SSFOREIGN DOMESTIC DOMESTIC Ei rr Ei  + = + −    +   ( ) () ( ) () ( ) / / 1 1 t t US US FOREIGN t US FOREIGN FOREIGN Ei E Spot Spot Ei + = + ( ) *B NEW MERGED NPV V N P = −  ( ) SYNERGY WITH MERGER NO MERGER WITH MERGER NO MERGER V V V V N P =− = −  ,2JM J M Cov   = Jt J MtRR   = + + ( ) ( ) ( ) ( ) ( ) % 1 1 CC Cost of refunding Value Outstanding Call Premi um t Transactions Costs t =   − +  −