CORPORATE FINANCE 1
Midterm Exam
Assoc. Prof. Dr. Hakk? Öztürk
1) You have 250 000 TL to invest. The first option is to buy a government bond for a year. At
the end of one year, you will have 325 000 TL net in your account. The second option is to
invest in a corporate bond that has 1 year maturity. The simple yield of this corporate bond is
%38. The third alternative is to buy a common stock at the current price of 5.60 TL and the
market forecasts a fundamental price of 8.12 TL per share for one year. Which option would
you invest and why? If you construct a portfolio of 3 assets mentioned above, that is investing
100 000 TL to government bond, 80 000 TL to corporate bond and the rest to common stock,
calculate the expected rate of return of your portfolio.
2) You invest 202 000 TL for 182 days. At the end of 182 days, you have 220 000 TL net in
your account. If the inflation for 182 days realizes around %10,5, what is your real rate of
return?
3) You invest 185 000 TL to a bank deposit account at gross rate of %42.5 for 56 days. If the
withholding tax rate is %5, how much would you have net in your account at the end of 56
days.
4)A commercial paper is issued for 240 days. The par value is 100 000 TL. The risk free rate
is %40 and the risk premium is %8. Find the price of this commercial paper.
5) What are the factors that determine the value of a security? Explain briefly.