Qaitios Ambs udsmersapat Gsravsga Shassct uLLioreal (HepeAg ALL ms ufone — 2011 Lamapib, apsgend: aipanpuyd - MCU 2308 aroub: esi (03) wenilghuinoorhsstr BieG: 13 pembuit 2011 Sept 09.30 apis — 12.30 tog oma Eevast: f v aMRUD AB! 05) eeTSSG LBD cteLunsSs. * Papas AI al G Qupsydsmen usiiushs oiqQuopPlssuGbd * paGawrG alenrayd 20 ystteMesonends Casirexi(Gstreran. |. (886 epeogacter GeumGamemuyd, BIG weasel ampnas srpsimm EMoUG Ese Est YSSuspouAonanuyd condos. (20 usta) 2.) ubigsmend GurgaTs eG Upset suSkOUTED UeaupmD igen GL eugiionsee side. (12 usta) Gi) UGS syst Poauidoredifer CUB aLTEusssn sonsEE (08 pias) 3.) dygnar uae oem wengsd, COREA smEWegIr sEMame sesso SUPA. (12 usta) (i) spemisg Sa Pops Gof saiyudsene opus Aniu sGAaGlUBd BLaQsMsamer Ausss. (08 states) 4.) UmigssiNer sommvaimment LIS saysaRissnar aBenEEES (06 ype) Gi) aTEIen idgEstel ln adong StoTAcalUEASpE! seg sore 7 (08 usta Gil) Fever oie (BSL) GAs RUB cps avBLeieTKd qpeMDBL GUT. 2.50, GUM. 3.50, GUT. 400 Lig Beunismer oiuTtédems. oD AG. AKEeE Geant ute Baud mB oipaS, 4% oaIS ofghse amisdum ufo s—MUMTdslUGEeHDS. Ligue 14 % agent asset CausiGaennat. BSL a sngnyan uridlas (equity share) Getyystor CupLnBuTenand mamas. (08 upshot) 5. () ABC ainua SBC, Ganesh ai Gameiancr (Debuntures) 2008 ggenayfl tb HewDucigy aupebug Bb Canes sch Us Soties! GUN. 1000/= ew Gupogus.s 12 % ROUEN, 2017 QObut 31 a, 10 aGLAEe (pMedUraupd CareinsrBb. aig Semper fe aupedcuAR. sbi Ogresglé ax air 01.01.2008 aster upgHe axeuorand (YIM) unas? (03. ysiatosin b. 01.01.2013 (ens) ernest cent) Bib Canes aLaies Bt alesiyid ek Bepinad Alin MLD I%alpb as selene ost sfoom ogmnaciyde? (06 ypitemsci) 6. Cioiug (b) 6 sShOTENEHUIL eenouienans Oana 01.01.2013 ses ser_apsn—s ‘aygaumusonen (CY) onan enc, (03 sitesi (i) mLgmambaiL Gsne8é sient (Corporate debenture) Gsm tym Gouin SIMEUITE eyreSberot andes. (08 stories 6. (i) Gusés& Gao (Operating Lease) 45d. elds etismsde5 (Financial lease) Bem Buuston Cue Caxmsnouienss aAuVPs Gs. (08 statist Gi) Gipmas Siorahsns EopOsriapd Cons SoaECnriGend soeSEOGSatin GCasiyus stpavismen longs. (02 usin 7. Usioguarumes ap eiUCuoaE. & auibgubsemd Uneumategaged (Risk diversification) b, south ailig 85 looser wpiituxssfinid (Zero coupons bond) €. 1685 pOGsufact (Financial intermediation) d. Gang sisi swwg\n3G (Credit rating) (20 ya (uBougflenryon3)THE OPEN UNIVERSITY OF SRI LANKA. BACHELOR OF MANAGEMENT STUDIES DEGREE PROGRAMME LEVEL 4 FINAL EXAMINATION 2011 MONEY AND CAPITAL MARKETS — MCU 2208 DURATION: THREE (03) HOURS DATE: 13th November 2011 TIME: 930 a Instructions: + Answer any five (05) questions only. + Each question carries 20 marks. + Non programmable Calculators are allowed to use. (1) Explain the functions of financial markets and its importance to improve living standard of the people in a country. (Marks 20) @ Explain the main steps that a company has to follow before @ public issue of share is made. (Marks 12) ii, Explain the major roles of stock broker firms. (Marks08) e i, Briefly describe major money and capital market instruments. (Marks12) ii. Describe the process of selling treasury bills by the Government, (Marks 08) ‘ (4) i. Explain factors that affect share prices. (Marks 06) ii, Explain how the price of an equity share is determined? (Marks 06) iii Bank Sri Lanka Limited (BSL) is expected to pay dividends of Rs. 2.50, Rs 3.00, and Rs 4.00 in the next three years respectively. After three years, dividend is expected to grow at a constant rate of 4% per year indefinitely. Stockholders’ required rate of return is 14%. Compute the value of BSL's equity share. (Marks 08) (©) i) ABC Company Limited issued a new series of debentures on 1" January 2008. The debentures were sold at par value which is Rs. 1000/=, have 12% coupon and mature in 10 years, on December 31" 2017. Interests are made semiannually. a) What was the Yield-to- Maturity (YTM) of company’s debenture on 01.01.2008? (Marks 03)b) What is the price of a debenture on 01.01.2013 (five years later) assuming that the required rate of retum is 10%? (Marks 06) ©) Find the current yield (CY) of a debenture on 01.01.2013, given the price determined in above (b). (Marks 03) ii) Explain the different types of risks associated with corporate debentures. (Marks 08) (6) i) Describe the major differences between operating lease and financial lease. (Marks 08) ii) Explain the factors that should be considered by a business firm when making leasing decisions. (Marks 12) (7) Write short notes on the following: i) Risk Diversification ii) Zero-Coupon bond iii) Financial Intermediation iv) Credit rating (Marks 20) -Copyrights reserved 00107Fable at Preset Value of 51 Due a he Ent of n Periods ; nae 00107. en a sy a a a gap om ee aR me oy Be 2 ew ee mM me ony mt pe Tis Ba a MB GN ome ol ST 2 mm ee Se oo ah moe aS i ae ee eR 2; me on a at an GS eB ee er ‘ sao as mn re eee ee ee 3 be tn Re a oa 4 SOS SS Sl ke ei ane ue ne a eed a4 eo SMS a> Se ae Soe erm mt 5 bet me oo Se Wo GR Se tos ee ee ter amc os an Be su Sa, oe ee eC nme mee su a1 4s 95 amas RE ema Boam jae ua. ote oo 0. 33038 32 Ue ie a sa im em a on ose Sn aa aw ae fas so 32035 Bi te ke is ote be om hs Gan sns oe Se es egy i) a usm 8B alg awa 3 33 te Gs Ss as 3a 22 Si Ue le sy amass aon sam nH an an ame 7 a8 ee ee ee ee) yom ne Ge Sa as PM Te Bn ‘ope ton toes) ss se oma QBs tm St Se a Se Be ze a ee ee nd Bonn wt Sm ae bn Sm De ins oe oe nee SG dial mot sls 2 is on Ge Sa Se re TOS ee tay st as oom omy ee ed 22 ‘aus a ee ee ee 2 om &o SD San zoe isn we Be Sh Be me Se on oko 3 ma be Se Se Zo im “an ae ee Xo ie an 6p 3 ig it “a we oem mat isa as bo) onus Os hos foes re a we Mee a a a am gms" an seat amt ua st oes an at om xs Soke Sp So Se ‘to “este a ee be 2 he Su on Ss x sys op fs mm) Or oe Sym Ga fo So a op emt oe apt on 3 Se ies he. amo Eye eat one om 3p omaha roo) myy ae) ise ap onus ns s0 & i i be em Gh Me Se te an ae ms ow mm eB 6 om am am By toe a a at bat uy aly mys 8 sm 5 Sm ie Ze fy hs at es may OO tow iS 3 os Be ism nw Sac iene os ton tots eS omt ‘bie AZ Present Value of sn Annuity of #1 per Pstod for n Pesos panes $b = EE Rage eae 1 ag enmtesre)—onmiy ays e9O4 05H OSI} —«ODIM am am em OE 4 See Sas Sts leat Theta Tatoo ams sn ss tems tater Sea 2 Mia gy fase bt trae hemo dg om ame Mam 2acis ane Lam 2 BM SS itm ia Son Met Sse Gai amen 3g 3a ea ae $B Ui Vom iiss ate ae Gino Somos au sen sae 6 3m5 sau jis dom ae ashe am 5 Gap ene Soy jaa jms teat Ges es ot oye tas fro Dna Saat Se Go ta tes 3 ten wer Bin Gt Some Da soe leet Lone ope Bos Shoe nor Gar Gus Sason Saiet Som ed vom 70 cam Ge sa 5650 a Bee mss Jo Te an Saar Got Seams Sa 3 Bee hse ie in 1 tes) tans Grr tom tay Hen ess Sac 551 is tee ee Jae Gon fom Fe Sie tas soar mcs Gay Sian S80 ams sr "isa lane bebe) a 3 ne 56s Mote ease ims aus santas aT ore Sos fut Ane oo Tae om ages km 7207 ie pane tom tae 7308 tov nat Saas esse 2At sae sar 2 mayo moun 8050 tome vaasss gaye: aoier 796m Germ 63108 3931S bbe oe 14st None tae ims tows Goe3 G37 Gouns 3am B BGs (eae tee am Som: tame yma Goa Ges aout 3H x hae is sae Maa Sis uo ime Gam Got ams hase fast tea aie Sine Sam a0: Gia Geet am Pa ee as tonne 9g 93609 Tus Gm GG Gu BEE fics isco lose abo isu ios tape sean iz 7506 Gos IBS GMA BBS Eins tern uo; Mam pace hig thems OMe 33056 tant? sah Sim 2B hae nowt isis ior Lear inom i 936 tame Guo as se 3 Rm bows owt tas Teego ttia nap dase Resse Tom aeons mus 286 ae gmt ness tase 9a wT Tome, ise Gas se bass ome is eet dro tage taps" Satie ass 8 xms ben ie ann 3 ‘oom fim lie Ga aut 2 ua fase Boe naw Sour ins ost fine ban Geos Gata S Gia hee Ema bias Som une Have She Bie ie eae§ eon Bore Scodenea ‘gemadcs qosuNshe (HID e1deIED - BD OD ede goon cBswesa — 2011 00053 ged wm gusian eogcee - MCU 2208 mea: ox Q08 (03) Yoo 2011.11.13 s8e00 62, ©. 930-2. 8.12.30 Ome gain emma (05) BENS; Goan. ye gclnamoe ened 20 aGel 86d. acon abaene Dg em Osim ag mdm 96 oa. 1. ges edgeemen mdacsi am da dom damoed on cide Qag myeHeD ogo dried emeded oe odsin. (cag 20) 2 @ (ii) 1) «i wa Gi) A> emodd HaQEDd cos nerwed 58sI qawens we gy Gorn Bu0d owRE aces. (ees 12) DAES eEwsoe mdumda QE mdsin. (emey 08) Bed eogesmned m EaIOw sdEgsmed mm om GID Bd. _Q@EE! emBcaut Bios dxlo, tempeg 12) Stiea BBS madmars Sdesl yoeDSEsI Geadla eke acsin. (eps 08) omiod Be enes8 SED MOD NORE Hsin. (exmeg 06) envios emod qoo ndsle emedie’ ome adele, (eq 06) ayelel G Gem 9B OSE QE EEE BZooWed 512.50, sy, 3.00 99 4.00 cee ore e@80o qedse) mcd, ode gamd og exmace 4% @ gosto sdonas gedou cS. smed Gbarlea qoas oom dea qREIES 14% 6 meies emoum odda5 Be Osis oosin. (eae 08)@ Gi) a a 00053 6. ©. ABC #6208 2008 SmOre 01 Yo mo Kiems Sqned msds. ‘see Bad ad 10SeF (2017 ecaGas 31 Fm) o8eiw om 12% ges edound 289 6z. 1000/- 9 mBo quad Sad NSD Ef. cams Hem go Ndeoo oxnB 6m08. (@) 2008.01.01 2nd eBmmeS gBerm |S (YIM) pEAerexpes 03) (@) 2013.01.01 (de Snmd a) to sanded Ge qed? qoan OSD 0eN REINS 10% FB gondona adslo. (e@ai 06) (qd 909 (7p) asine mE Be cem® adomn siamded adder gSer0¢ (Current yield) 2013.01.01 ta0 oH ecein. (ex 03) Erabe amd m1 age 550 wom odo oH asin. (ea 08) Seremd He (Operating lease) ese ges (Financial lease) Go gos gor conda® Sdas aoxin. (expe 08) Cie BGae Goss oySs8t OMG Nanna sem aes gy Md Hosdea BWwRE dein. (ea 12) eno @ BEae emdnonei Easin, @ i) (iii) oy) qoorDe® SSorHind.eH (Risk Diversification ) gen Qos! ages (Zero Coupon Bond) 2e48 qose;(gede%e (Financial Intermediation) saad oda. (Credit rating) (eq 20) - 88d qdseh -fable Ae) Present Vale SE Dee 20he fn of Period: 1, am rr a ee ee 5 a we GS ke tm fe oe oe ma Sn om 3 ie oi oe ae me gern kw Sie i 0 ee ee ee oo 3s ee Sit ee ee ee ee psi am 10 sn $e ene Gi Gh Sy om os Th im i he ee er ee ae ee io im to $3 i me ae op soe SE ane uo et eam a ee ‘oe ne 5 me Bm am ams ms on oe om ae 2 TR i. 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