ACC501 Assignment No 1 Solution Spring 2019

ACC501 Assignment No 1 Spring 2019

Dear Students, Here you can read or Download ACC501 - Business Finance Assignment No 1 Solution of Semester Spring 2019. ACC501 Assignment Due Date is 22 July 2019. Total Marks are 20. We are here to facilitate your learning and we do not appreciate the idea of copying or replicating solutions. ACC501 Assignment Solution File in .docx format has been added below.
Previously we shared CS403 Assignment No 3 Solution Spring 2019.

ACC501 Assignment Question No 1:

You are working as an investment analyst in a brokerage firm. Currently, one of your clients visits your office to discuss a proposal regarding the purchase of Saleem Corporation’s stock. The firm has recently paid an annual dividend of Rs.5 per share. The client’s required rate of return on such kind of stock is 12%. Dividend policy of Saleem Corporation is uncertain and it may adopt any of the following policy regarding payment of future dividends:

The dividend will grow 0% till infinity (2 Marks)
The dividend will grow at a steady rate of 6% to infinity (3 Marks)
The dividend will grow 8% for each of the next 4 years followed by a constant annual growth rate of 6% in the fifth year to infinity. (10 Marks)

Required Task:
Calculate the value of the common stock of Saleem Corporation under each of the above-given assumptions.

ACC501 Assignment Question No 2:

Elite Corporation has the following mutually exclusive projects. (5 Marks)
Years Project A Project B
0 -100,000 -100,000
1 60,000 50,000
2 35,000 40,000
3 38,000 35,000
4 17,000 25,000

Elite Corporation is currently using the NPV technique to rank such kind of projects. You are required to suggest which project is more appropriate to undertake by considering the appropriate discount rate is 15 percent.

Please Note: Complete calculations are required for each question (1) and (2).
Incomplete calculations will result in loss of marks.

Also read: How to Improve your grades after a Poor Midterm Exam