Question $2-$ Time Value of Money and DCf Techniques

A$.$ Peter deposits K $1000$ annually in a bank for $5$ years. This deposit earn a compound

interest of $10$ percent. What will be the value of this series of deposits at the end of $5$

years?

$(4$ Marks$)$

B$.$ John wishes to determine the present value of the following cash flows discounted at $10$

Required to calculate the present value of the above given figures. $(3$ Marks$)$

C$.$ Find out how much does a deposit of $K5000$ grow to at the end of $6$ years, if the

normal rate of interest is $12\%$ and the frequency of compounding is $4$ times a year?

$(3$ Marks$)$

D$.$ How to prepare amortization of loan table? Give illustration. $(5$ Marks$)$

Question $3-$ Valuation of Shares & Bonds

A$.$ A company has just paid a dividend of $50$ toea per share and that dividend is

expected to grow at a rate of $20\%$ per annum for the next $3$ years, and at a rate of $5\%$

per annum forever after that. Assuming a required rate of return of $10\%.$