a) Find the Future Value of an annuity for K1,000 paid at the end of each year
Question:
a) Find the Future Value of an annuity for K1,000 paid at the end of each year for 3 years
assuming interest is compounded annually at 7%?
b) Find the future value of an annuity due where K1,000 is paid at the beginning of each year
for 3 years at 7%?
c) A company offer annual payments of K1,000 at the end of each year for the next three years.
What is the present value of this annuity discounted at 7%?
d) A company offer annual payments of K1,000 at the beginning of each year for the next three
years. What is the present value of this annuity discounted at 7%?
e) Bond C has a K1,000 face value and provides an 8% annual coupon for 30 years. The
appropriate discount rate is 10%. What is the value of the coupon bond?
F) Discuss how the wealth of shareholders can be maximised in the context of listed
company such as Zambia Sugar Plc.
G) Discuss the reasons maximisation of shareholder wealth is the primary objective of
profit oriented organisations compared with other financial objectives such as profit
maximisation, expansion of market share and increased earnings per share.
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon