a. Bond issued on 1/1/05 (par value Rs.

1000) coupon rate 10% payable semi

annually (On 30th of June and 31st of December every year). Discount Rate
12%. The bond is redeemable on 31/12/20. Mr X purchases the same on
1/1/13.
i. Calculate the YTM
ii. What Is the value of bond as on 1/1/13
iii. What is the value of bond as on 1/3/13
a. Ramesh and Company a leading manufacturer of Healthcare products, had a return
on Equity in 1992 of 31.4% and paid out 36% of earnings as dividends. It earned a
net income of 1625$ Million on a book value of equity of $5171 Million. As a
consequence of healthcare reforms, it is expected that the return on equity will drop
to 25% in 1993 and that the dividend payout ratio will remain unchanged.
1. Estimate the growth rate in earnings based on 1992 Figures.

2. Estimate the growth rate in 1993, when the ROE Drops from 31.4%
to 25%.

3. Estimate the growth rate after 1993, assuming that 1993 numbers
can be sustained in future.