PGDM (2017-19) Term ~ IV S Institute of MID - TERM EXAMINATION Management Technology Nagpur INVESTMENT MANAGEMENT (Section ABCD) @ @ @ ‘Time: 1 hour Maximum Marks: 20 Weightage: 20% Full Name of the Student: Roll N Section: Signature of the Invigilator INSTRUCTIONS: 1, It’s a Question-cum-Answer Sheet. 2. Answer all questions in the limited space provided. 3. No additional sheets will be provided. 4. Use of a Scientific Calculator only is allowed. 1. Find the convexity of a bond issued by Shivam Ltd which has the following characteristics: Maturity: 5 years; Coupon: 9%; Yield to Maturity: 9%; Face value is Rs 100; interest is paid annually (3 marks) ‘ cr \ > 2 4 3 4 4 q C q2. For the next three years, the annual dividends of a stock are expected to be Rs 2, Rs 2.10 and Rs 2.20. The stock price is expected to be Rs 20 at the end of the three years. If the required rate of return on the shares is 10 percent, what is the estimated value of the share? (2 marks) 3. Kingston Wires Ltd has a current dividend of Rs 2 per share. The expected rate of growth of dividends of the company is given below: Year Dividend growth rate (%) 1to3 25 4106 20 7109 15 10 onwards 8 If the company’s cost of equity is 14%, compute the intrinsic value. (5 marks) PGDM (2017-19) Term-IV: Mid Term Examination ~ Investment ManagementWye attr) inl a a(has)” ray Cina) Trp + a(r 6K) 4 2th Jd" + aias) G ay Guy Gye s) + afore 4 2g fer fan) (eos ay os ee Qn)? e” 8 Lara. oe yn 08 : 2 8S gut, ENO, BEET 8 ae ne oo ey (om) cy) pet ne te gee 10,266 9 ey Ge Case OH) + 1.087 a, Cares cory eee eo ene 2 Suara eh8Ias os w ABST PGDM (2017-19) Term-IV: Mid Term Examination — Investment Management