1) Firm A distrubuted dividends to its shareholders for the current year according to the payout ratio of 25%. Net profit was 80 million TL. Total shares are 10 million. The dividends are expected to grow at a constant rate of %12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark government bond in TL yields at %14 and the risk premium is %6. If one share of firm A is selling at 32 TL in Borsa Istanbul, would you invest in this stock ? Is it undervalued or overpriced ? 2) An investor considers investing 100 000 TL for the next year. This investor has 3 options. The first option is to buy a government bond that sells 100 TL. The par value of this government bond is also 100 TL and the remaining maturity is 1 year. This government bond pays %20 annual coupon interest. The second option is to buy a commercial paper which sells 2200 TL discount. The par value is 10 000 TL and the maturity is 1 year. The other alternative is to invest in a common stock for a year. The current market price of the common stock is 6 TL per share and 1-year target price estimation of the market analysts is 7.90 TL on average for this share. Which option would you invest in and why? Show your answer mathematically. 3) What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the market interest rates rise (ytm goes up) c- If the market interest rates go down (ytm goes down) 4) Fixed Assets: 915 642 947 TL, Current Assets: 377 851 878 TL, Short-Term Liability: 238 802 542 TL, Long-Term Liability:210 752 421 TL, Total shares: 191 447 068, According to above information, calculate financial leverage, net working capital, equity and equity value per share. 1) Firm A distrubuted dividends to its shareholders for the current year according to the payout ratio of 25%. Net profit was 80 million TL. Total shares are 10 million. The dividends are expected to grow at a constant rate of %12 in the following years. Find the fundamental price per share according to Gordon Model if the Turkey 10 year benchmark government bond in TL yields at %14 and the risk premium is %6. If one share of firm A is selling at 32 TL in Borsa Istanbul, would you invest in this stock ? Is it undervalued or overpriced ? 2) An investor considers investing 100 000 TL for the next year. This investor has 3 options. The first option is to buy a government bond that sells 100 TL. The par value of this government bond is also 100 TL and the remaining maturity is 1 year. This government bond pays %20 annual coupon interest. The second option is to buy a commercial paper which sells 2200 TL discount. The par value is 10 000 TL and the maturity is 1 year. The other alternative is to invest in a common stock for a year. The current market price of the common stock is 6 TL per share and 1-year target price estimation of the market analysts is 7.90 TL on average for this share. Which option would you invest in and why? Show your answer mathematically. 3) What is the relationship between price and yields for fixed income securities? There is a government bond with a par value of $1000, and %4 semi- annual coupon rate. The bond was issued 6 years ago when the market interest rates are 8%. (The yield to maturity is %8). The remaining maturity of this bond is 1,5 years. Make comment about the price of this bond. a- If somehow, the market interest rates remain unchanged (ytm unchanged) b- If the market interest rates rise (ytm goes up) c- If the market interest rates go down (ytm goes down) 4) Fixed Assets: 915 642 947 TL, Current Assets: 377 851 878 TL, Short-Term Liability: 238 802 542 TL, Long-Term Liability:210 752 421 TL, Total shares: 191 447 068, According to above information, calculate financial leverage, net working capital, equity and equity value per share
