Corporate Finance Mid Semester Test 
SCHOOL OF ECONOMICS, FINANCE & MARKETING
CORPORATE FINANCE
MID SEMESTER TEST
FIRST SEMESTER 2008 – Part-time
STUDENT DETAILS (Please Print Clearly)
Family Name: ___________________________________________________________
First Name: _____________________________________________________________
Address: _______________________________________________________________
Tel. No: (BH) ___________________________________________________________
Student Number: _________________________________________________________
Date: __________________________________________________________________
TEST DETAILS
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•
•
•
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Writing Time : 1 hour and 15 minutes
Reading Test : 10 minutes
This test contributes 30% towards students’ final grade.
This test consists of 2 sections: Section A (30 marks) and Section B (30 marks)
All questions must be attempted.
INSTRUCTIONS TO STUDENTS
• Fill in your details in the Student Details section above.
• Do not communicate, or attempt to communicate, with any other candidate.
• Please refrain from any dishonest practice. This includes, but is not limited to, referring to materials that you may have on your person, referring to materials that you may have stored in your programmable calculator, etc.
• This test paper is to be handed to the test supervisor in its entirety and unfolded.
• All answers must be clearly written.
• The answers to all questions must be contained within this test paper.
STUDENTS MUST SWITCH OFF ALL COMMUNICATION DEVICES.
Corporate Finance
Page 1 of 3
SECTION A - SHORT ANSWER QUESTIONS
Total for Section A – 30 marks
(6 questions x 5 marks each)
ANSWER ALL QUESTIONS
DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS.
1.
“If the current stock price were greater than P 0 =
Div 1 + P 1
(1 + r e ) we would expect investors to rush in and buy it, driving up the stocks price.”
The valuation model above calculates a stock’s current price by finding the
CORPORATE FINANCE
MID SEMESTER TEST
FIRST SEMESTER 2008 – Part-time
STUDENT DETAILS (Please Print Clearly)
Family Name: ___________________________________________________________
First Name: _____________________________________________________________
Address: _______________________________________________________________
Tel. No: (BH) ___________________________________________________________
Student Number: _________________________________________________________
Date: __________________________________________________________________
TEST DETAILS
•
•
•
•
•
Writing Time : 1 hour and 15 minutes
Reading Test : 10 minutes
This test contributes 30% towards students’ final grade.
This test consists of 2 sections: Section A (30 marks) and Section B (30 marks)
All questions must be attempted.
INSTRUCTIONS TO STUDENTS
• Fill in your details in the Student Details section above.
• Do not communicate, or attempt to communicate, with any other candidate.
• Please refrain from any dishonest practice. This includes, but is not limited to, referring to materials that you may have on your person, referring to materials that you may have stored in your programmable calculator, etc.
• This test paper is to be handed to the test supervisor in its entirety and unfolded.
• All answers must be clearly written.
• The answers to all questions must be contained within this test paper.
STUDENTS MUST SWITCH OFF ALL COMMUNICATION DEVICES.
Corporate Finance
Page 1 of 3
SECTION A - SHORT ANSWER QUESTIONS
Total for Section A – 30 marks
(6 questions x 5 marks each)
ANSWER ALL QUESTIONS
DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS.
1.
“If the current stock price were greater than P 0 =
Div 1 + P 1
(1 + r e ) we would expect investors to rush in and buy it, driving up the stocks price.”
The valuation model above calculates a stock’s current price by finding the