College of Administrative and Financial Sciences
Principles of Finance (FIN101)
Deadline for students: (23/04/2022@ 23:59)
Course Name: Principles of Finance
Course Code: FIN101
Student’s ID Number:
Academic Year: 1443/1444 H, Second Semester
For Instructor’s Use only
Instructor’s Name: Bandar Almutairi
Level of Marks:
Instructions – PLEASE READ THEM CAREFULLY
❖ This assignment is an individual assignment.
❖ The Assignment must be submitted only in WORD format via the allocated
❖ Assignments submitted through email will not be accepted.
❖ Students are advised to make their work clear and well presented. This also
includes filling in your information on the cover page.
❖ Students must mention question numbers clearly in their answers.
❖ Late submitted assignments will NOT be entertained.
❖ Avoid plagiarism; the work should be in your own words; copying from
students or other resources without proper referencing will result in ZERO
marks. No exceptions.
❖ All answered must be typed using Times New Roman (size 12, doublespaced) font. No pictures containing text will be accepted and will be
Submissions without this cover page will NOT be accepted.
Q1. What is the current market price of a bond that has a face value of $1 million at the end of 2
years and pays semiannually coupons at a rate of 5.2% p.a., if the discount rate is 5% p.a.? (Show
your calculations) (1.5 Marks)
Q2. Facebook paid its common stocks a dividend of $0.77 last year. The company expects growth to
continue at 7% p.a. for the next 2 years and 5% p.a. thereafter. What is the current price of the
share? common shareholders’ rate of return is 10% p.a. (Show your calculations) (2 Marks)
Q3. Your company is looking at a project that requires a $50,000 investment. It is expected that the
project will generate cash flows of $15,000 in year 1, $20,000 in year 2, $17,000 in year 3, and
$13,000 in year 4. Using the NPV method, should the project be undertaken if your shareholders’
required rate of return is 12%? (Show your calculations) (1.5 Marks)
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