Bonds - Semi Annual Interest

answered 1 day ago

Illustration 17: Sir, in this case of semi annual interest, YTM and Realized yield is calculated w.r.t semi annual interest. For duration, the result is divided by 2 as it is obviously cannot be more than 5 years. Is semi - annual answer sufficient or we need to annualize YTM and Realized yield? And I think simply multiplying it with 2 wouldn't do.

latest answer

Semi annual answer is sufficient - certain measures need not be annualized because they are dependent on coupon frequency

Durai Murugan

CA Final

★ 465

1

30

MCQ doubt

answered 1 day ago

Sir, international financial management MCQ 10...in case of issue price floatation cost is not considered in icai sm... should we consider it sir ?? Has icai wrongly computed the issue price?

latest answer

Thank you sir .

sai pramod

CA Final

★ 31K+

2

39

Investment expenditure

answered 1 day ago

Pre Tax Income inculdes Invt. Exp, over and above 5% of Invt. Is it an assumption?

latest answer

Ok sir. Now its clear.

Durai Murugan

CA Final

★ 465

4

30

Forward rate

answered 2 days ago

Can we directly calculate Forward Rate by, F2= (1+YTM of 2 year bond)^2 / (1+YTM of 1 year bond) F3= (1+YTM of 3 year bond)^3 / (1+YTM of 1 year bond)^2 and likewise for the remaining?

latest answer

Yes

Durai Murugan

CA Final

★ 465

3

31

Market premium %

answered 2 days ago

To calculate Market premium %, should we use Market Premium/Price of convertible debenture or Market Premium/Conversion value? Market Premium/Price of convertible debenture is logical because Price of convertible debenture is a done outflow.

latest answer

Thankyou sir

Durai Murugan

CA Final

★ 465

4

61

Exchange margin in Fate of contracts

answered on 21-Jul-24 14:25

When interbank rates is given in the question also, in few inter bank transactions exchange margin is calculated. Kindly help me out to understand when exactly exchange margin should be calculated in date of contracts problems.

latest answer

have a look at image below

vijay anvesh

CA Final

★ 85

1

32

Explicit period and Perpetuity period

answered on 20-Jul-24 19:52

Let's say Dividend is expected to grow at 18% per annum for the next four years. The growth will decline linearly to 14% per annum after first four years. Thereafter, it will stabilise at 14% per annum infinitely. Growth rate for, D1to D4 = 18% D5 = 17% D6 =16% D7 = 15% D8 to D infinity = 14% 1st case: P = PV of Dividends from D1 to D8 + PV of P8 --- WHICH IS USED IN ILL 28 2nd case: P = PV of Dividends from D1 to D7 + PV of P7 --- WHICH IS USED IN ILL 39 2nd case logic is used in this Ill 46 as well. What is the logical or appropriate method? 1.

latest answer

Thanks sir, I reverse worked this Illustration and arrived same CMP given in the question.

Durai Murugan

CA Final

★ 465

2

55

CAPEX

answered on 20-Jul-24 06:21

Should capex belong to operational activities? If yes, should we assume it?

latest answer

no capex is investment activity. you cannot assume it to be operational

Durai Murugan

CA Final

★ 465

1

39

Dividend on revised shares

answered on 19-Jul-24 11:34

If bonus shares are issued at the end of the year, should we assume bonus is post dividend and calculate revise dividend from 5th year

latest answer

Depends on Question - question will specify clearly. Dividend has a record date and so does bonus issue - question should clarify the record dates

Durai Murugan

CA Final

★ 465

1

35

Increase or Decrease in Expected rate of return

answered on 19-Jul-24 07:29

Sir, if risk increases, K also increases and therefore price falls. So incase of unfavorable ratios, the difference between the company and market/industy ratios, it is added to expected K to arrive the company's K. Am I correct or I need further understanding?

latest answer

Thankyou sir

Durai Murugan

CA Final

★ 465

2

49