On PUBLIC DEMAND, planning to solve 3 questions on BOND FORWARD !!!

Have ur dinner. 🍽️ in 40 mins we meet !!!

Done donaaa done done

Wat an amazing session

Thanks a lot…

https://www.youtube.com/live/qWk5WWFIuGQ?si=MrDEAcIszZskK-xN

Check Valuation of Security and Mutual funds Qns

Let me know if any questions to be added !!!

JOT DOWN YOUR MANIFESTATION
Let this be your mobile wallpaper or stick it on the wall where you sit to study.
Let your dreams stare back at you every single day.
Believe it. Write it. See it. Achieve it.

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All confusions cleared !!!

https://youtu.be/OSg5QjtgW7E

BOND FORWARD Can come for MCQ in Exams as a Compulsory Qn. Do it properly and go!!!

Rgds

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Let’s Have MCQ Test Tonight at 10pm 🕙

5 qns, 2 Marks each. 🖊️

Ch : Risk Management, Valuation of Sec, Mergers, Bond !! 📚

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Let’s start 🕺

A 5-year bond with a ₹1,000 face value pays an annual 6% coupon and is trading at a Clean Price of ₹970. If 4 months have passed since the last coupon payment, what is the Dirty Price?

Above was just to get u started…

Real Qn starts below :

Qn 1

A ₹1,000 bond pays 10% annual coupon, but its first coupon is after 9 months from the issue date instead of 12 months. The Clean Price is ₹960. What is the Dirty Price on the day of purchase, if 3 months have passed since issuance?

Qn 2 :

Company X acquires Company Y.

Value of X = ₹6,000 Cr

Value of Y = ₹2,000 Cr

Synergy Expected = ₹500 Cr

Purchase consideration = ₹2,400 Cr

Question:
(a) What is the value of the combined entity?
(b) Is there value creation?
(c) Who gets how much synergy benefit ?

Question 3

A firm has an EPS of ₹12, and is expected to grow at 5% perpetually. It pays out 40% of earnings as dividends. The cost of equity is 12%.

Question:
(a) Calculate the value of the firm using the Gordon Model
(b) If payout increases to 80%, what will be the impact on the firm’s value?

Qn 4

A company has to borrow ₹10 Cr for 6 months starting 3 months from now. It fears interest rates will rise and enters into a 3 × 9 FRA at 7%. On FRA settlement date, the actual 6-month interest rate is 9%.

Question:
What is the gain/loss on FRA and effective interest cost?

Qn 5

An investor holds a bond of ₹1,000 face value, 5-year maturity, 8% annual coupon. Current market yield is 10%. Also, he is evaluating a stock expected to pay dividend of ₹20, with growth of 6%, and cost of equity of 14%.

Question:
(a) What is the value of the bond?
(b) What is the intrinsic value of the stock?

How was ur ROADIES Task ?

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Life Lessons !!!

Afm news !!!

Also, Continuing with LIVE REVISION FOR MAY 25 tonight, but ensure that you guys are attending it live !!!

https://youtube.com/shorts/iHAeMKneagU?si=KUlfE3NAKmhj-Qrn