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Sources of Finance and Value Assignment

   

Added on  2020-07-22

9 Pages1112 Words60 Views
FINANCE AND VALUE

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1(1)Problem 1....................................................................................................................................1(2) Problem 2...................................................................................................................................1(3)Problem 3....................................................................................................................................1(4) Problem 4...................................................................................................................................2(5) Problem 5...................................................................................................................................2(6) Problem 6...................................................................................................................................2(7)Problem 7....................................................................................................................................3(8) Problem 8...................................................................................................................................3(9) Problem 9...................................................................................................................................3(10) Comparison of characterisitcs of bond and equity...................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5

INTRODUCTIONFinance is the one of the important domain to which firms give due significence whilemaking decisions. There are different concepts related to finance that are used in day to daypractice. In current report varied calculations related to present value, future value, valuation ofbond and equity is done. At end of report, comparison is made between debt and equity andrecommendation of source of finance is made.(1)Problem 1Table 1Computaion of present valuePV3500FV at7%6885.029751FV at 9%12748.68861FV at 5%9286.541968InterpretationPresent value at 7% is 6885 and same at 9% is 12748. While at 5% disocunt rate futurevalue is 9286. This means that with change in discount raye future value also get changed.(2) Problem 2Table 2Calculation of present valueYearsInterest rateFVPV54%1525012534.3883887%3055017780.378141210%850400270963.64742015%52512532085.28398(3)Problem 3Table 3Calculation of interest ratePVYearsFVPV/FV1/YearsPV/FV^1/YearsPV/FV^1/Years-1Interest rate2822.003251.152482270.51.073537270.073537277.3537269736076.008911.4678747940.1666666671.0660596410.0660596416.6059641163260012.001423854.3676380370.0833333331.1307169090.13071690913.071690875743522.004632008.0647688690.0454545451.0995341540.0995341549.9534153521 | P a g e

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