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UNIVERSIDAD DEL PACFICO

DEPARTAMENTO ACADMICO DE CONTABILIDAD
FINANZAS CORPORATIVAS
AO 2011 - SEGUNDO SEMESTRE
Profesor:
Samuel Mongrut
Tiempo:

Cdigo

02 horas
FINAL EXAM

1.

Five years ago Karla Cabellos bought the company "Musique" for 4 million
dollars, one million dallar more than its book value at that time. With the
Company, Karla hired a research and development team dedicated to
producing and manufacturing new types of vinyl capable of reproducing music
with high fidelity, such the old vinyl, but at the same time resistant to
scratches. During year 2011, they managed to develop such type of vinyl
and to put it ready for the market. The following tables show the Balance
Sheet and the Profit and Loss Statement of the company for 2011.
BalanceSheet
Company "Musique"
(In Thousands of dollars at December2011)
Assets
Cash

US$
100

Account Receivables
lnventory
Goodwill
Cumulative Amortization
Fixed Assets
Cumulative Depreciation
Total

1000
1500
3000
-1000

Labilities
Account Paya bles
Long-Term Debt

US$
100
900

Equity
Social Capital

1500
-500

Retained Earnings

3000
1600

5600

Total

5600

Profit and LossStatement

Company "Musique"
{In thousands of dollars for the year 2011)

Sales
Cost of goods sold
GrossMargin
Sales and Administrative Expenses
Amortization of Goodwill
Depreciation of fixed assets
Expenses in Research and Development
Extraordinary gains and losses
Earnings befare interests and taxes
lnterest
Earnings befare taxes
Taxes (30%)
Net income

US$
6000
-3000
3000
-500
-200
-100
-1000
-500
700
-100
600
-180
420

Given the previous information you are being asked to answer the following
questions:
1.1

Estimate the lnvested Capital of the Company "Musique" for year 2011.
Note: Take into account only the accounts that reflect invested capital

with a cost for the company in arder to generate the profit from the core
business.
(02 points)
Answer:

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00

Estimate the corresponding Net Operating Profit Less Adjusted Taxes

(NOPAT)foryear2011
(02 points)
Answer:

--

1 .3

lf the unlevered cost of equity is 15%, the cost of debt is 10% and the
total market capitalization of the company is US$ 5100 dollars, what is
the levered cost of equity for the company? Note: The company long-

term is quoted in the capital marketwith a ratingAAA

Answer:

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(02 points)

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1.4

Estimate the company economicvalue added (EVA) for the year 2011.
lnterpret the result
(02 points)
Answer:

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1 .5

Do you agree with the following statement from Prof. Damodaran (2001,
p. 821) " ... Economic Value Added is an approach skewed toward
assets-in- place and away from future growth ... " Explain your answer.
(02 points)

Answer:

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Mrs. Cabellos hired Mr. Sergio Medina to help her to establish a proper
dividend policy for the company. During the last five years, the Company
"Musique" had a net income annual growth rate of 15% and Mr. Medina is
thinking that this growth rate could be kept into the future. lf the dividend
payout ratio was 25% for 2011, you are being ask to answer the following
questions:
2.1

What will be the distributed dividends in year 2012 if the company

follows a policy of growingdividends?
(01 point)
Answer:

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2.2

What

will be the distributed

dividends

in year 2012

company follows a policy of constant dividend payout?

point)

if the

(01

Answer:

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2.3

lf the company is facing a capital budget of US$ 426,000 dollars for the
year 2012 and it is operating at its optimal capital structure, what would
be the distributed dividends in year 2012 if the company follows a
residual approach?
(01 point)
Answer:

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Which of the previous dividend policies is the better for the company?
Explain your answer.
(01 point)
Answer:

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3.

During the last year, Mrs. lrma Tam financia! manager of "Papelito Company''
has been worried about the decreasing level of monthly credit sales, which on
average are about US$ 80,000 dollars and also with a decreasing market
share dueto the entrance of its main competitor "Arts Company". According to
the new sales manager, Mr. Victor Quispe, "Arts Company'' has "stolen"
customers dueto an aggressive credit policy that goes with a discount for
early payment of 10/30, n/60. Given this situation, Mrs. Tam has decided
ease the company credit policy by changing its current discount for early
payment from
5/30, n/60 to 20/30, n/60. The new credit policy for "Papelito Company" is
expected to raise the level of monthly credit sales to US$ 120,000 dollars and
to increase the proportion of credit sales that will take the discount for early
payment from 40% to 60% of the average monthly credit sales.
In the other hand, Mrs. Tam has decided to avoid the opportunity cost of having
cash in the company and she has established the policy of investing any
excess of cash in short-term fixed income securities with a variable cost of US$
0.002 anda fixed cost of US$ 30 dollars per deposit. However, whenever she
has to withdraw part of this investment, her broker will charge a variable cost
of US$ 0.004 dollars anda fixed cost of US$ 40 dollars per withdrawal. Given
this information you are asked to:
3.1

Determine the monthly opportunity cost of having cash for "Papelito

Company" assuming that its providers are offering a discount for early
payment of 20/30, n/60.
(02 points)
Answer:

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3.2

What is the minimum monthly cost of managing cash far "Papelito

Company"?
(02 points)
Answer:

3.3

lf the annual effective opportunity cost for "Papelito Company'' with the
previous discount for early payment was 7%, lt is convenient or not for
the company to implement the new discount for early payment equal to
20/30, n/60?
(02 points)