SPRING 2021 MID TERM EXAM FIN 200 Problem 1 (15 Points) You have the following bond maturing in 4 years: Face Value = 1.000$; Semiannual dividends = 30$; Annual Interest rate= 4% 1. Compute the PV of...

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SPRING 2021 MID TERM EXAM FIN 200 Problem 1 (15 Points) You have the following bond maturing in 4 years: Face Value = 1.000$; Semiannual dividends = 30$; Annual Interest rate= 4% 1. Compute the PV of the cash flows? 1. What will happen to the bond price if the interest rate increases to 6%? Problem 2 (20 Points) ONCF has issued a 4% bond maturing in 5 years. The bond pays semi-annual coupon. 1. If the required rate of return is 2.5%, compute the PV of the bonds. 2. What will happen to the price of the bond: A. Interest rate increases to 4%? B. Interest rate decreases to 1.5%? Explain in details all your answers. Problem 3 (15 Points) You are interested by the growth opportunities that offer a company listed in Casablanca stock market. You are expecting this company to pay a Dividend of 15 MAD next year and its price is expected to be 250 MAD. 1. If the expected return is 10%, compute P0 (price of the bond today). 2. If the current price is less than the price computed in part 1, what you will do as an investor? Problem 4 (50 Points) The financial statement of CIH, a Moroccan bank, of the years 2015 and 2016 are given below. You are required to compute and analyze the trend of the main ratios: · Liquidity: 4 ratios · Leverage (financial) ratios: 3 ratios · Profitability ratios: 3 ratios In total, you have to compute and interpret 10 ratios for both 2015 and 2016. All the figures are in MAD Thousands