The document discusses several assignments related to valuation of bonds and shares. It includes 10 illustrations providing examples and step-by-step solutions to problems involving calculating bond yields, present values of bonds, and share valuation using dividend growth models and required rates of return. The assignments were submitted by a student to professors at Fareast International University for a principles of finance course.

1. BUS 513: Principles of Finance
An Assignment on
Problem & Solution related to Valuation of Bond & Share
An Assignment on
The Practice of Just-in-Time Production Model in
Toyota Automobile Company in Japan
An Assignment on
The Practice of Just-in-Time Production Model in
Toyota Automobile Company in Japan
An Assignment on
The Practice of Just-in-Time Production Model in
Submitted by:
Md. Nazrul Islam
Student ID:18203004, Fall 2019, EMBA, Session:2018-19
Department of Business Administration
Submitted to:
Professor Dr. Md. Kayem Uddin
Faculty
Department of Business Administration
Submitted by:
Md. Nazrul Islam
Student ID: 18203004, Spring 2020, EMBA
Department of Business Administration
Submitted to:
Mr. Sk. Kamrul Hassan
Assistant Professor and Course Coordinator
Department of Business Administration
FAREAST INTERNATIONAL UNIVERSITY (FIU)
An Assignment on
The Practice of Just-in-Time Production Model in
Toyota Automobile Company in JapaFAREAST
INTERNATIONAL UNIVERSITY (FIU)
An Assignment on
The Practice of Just-in-Time
Production Model in Toyota
Automobile Company in Japan
An Assignment on
The Practice of Just-in-Time Production Model in
Toyota Automobile Company in JapaFAREAST
INTERNATIONAL UNIVERSITY (FIU)
An Assignment on
The Practice of Just-in-Time Production Model in
Toyota Automobile Company in JapaFAREAST
INTERNATIONAL UNIVERSITY (FIU)
November 2020
R.S.R Tower, House # 50, Road # 11, Block – C, Banani, Dhaka-1213, Bangladesh

2. Page | 1
Contents
Illustration #01. A bond has a face value of $1,000 and a coupon rate of $9 per annum. The bond
is currently selling in the secondary market at a price of $800. Calculate the current yield?........... 2
Illustration #02. Bond of face value Tk. 1,000 with a coupon rate of 8% and present value of Tk.
700 has a maturity period of 5 years. Calculate the yield to maturity (YTM) on the bond. .............. 3
Illustration #03. Suppose an investor is considering the purchase of a five-year, Rs. 1000 par
value bond, bearing the annual coupon rate of interest of 7%. The investor’s required rate of
return is 8 %. What should he be willing to pay now to purchase the bond if it matures at par? .... 4
Illustration #04. What is the present value of a 10-year, $1,000 par value bond with a 10% annual
coupon if its required rate of return is 10%? ........................................................................................ 5
Illustration #05. A 10 years bond of Tk.1000 has an annual rate of interest 12%. The interest is
paid half-yearly. If the required rate of return is 16%, what is the value of bond?............................ 6
Illustration #06. The government is proposing to sell a 5-years bond of Tk. 1000 at 8% rate of
interest per annum. The bond amount will be amortized equally over its life. If an investor has a
required rate of return of 7%, what is the bonds present value for him?........................................... 7
Illustration #07. An investor intends to buy an equity share of a company from the secondary
market and hold it for one year. He expects to get a dividend of Tk. 2.00 per share next year and
would sell the share at a price of Tk. 21 at the end of year. His required rate of return is 15% on
his investment. How much should he pay for the share today?........................................................... 8
Illustration #08. An investor desires to purchase the equity share of a company from the
secondary market. The investor prefers to hold the share for a period of four years and dispose-
off the share after four years. He expected to get a dividend of Tk. 6.00, Tk. 6.50, Tk. 7.50 and Tk.
9.00 per share in the next four years respectively. He is hopeful of selling the share in the
secondary market at a price of Tk. 120 after the end of four years. He expects a return of 22% on
his investment considering the level of risk associated with it. Calculate the present value of the
share to the investor................................................................................................................................ 9
Illustration #09. A company is expected to pay a dividend of Tk. 4.00 per equity share for the next
year. The dividends are expected to grow perpetually at rate of 12% every year. Estimate the
price of share today if the market capitalizes dividend at 12% for the investor.............................. 10
Illustration #10. A company’s share is currently selling for Rs 50 per share. It is expected that a
dividend of Rs 3 per share and a price of 52 will be obtained at the end of the one year. Calculate
the rate of return? Should the share be purchased?........................................................................... 11

3. Page | 2
Problems and Solutions related to Valuation of Bond
Illustration #01. A bond has a face value of $1,000 and a coupon rate of $9 per
annum. The bond is currently selling in the secondary market at a price of $800.
Calculate the current yield?
Solution:
Here Given,
Face value of Bond=$1000
Coupon rate=$9
Current price of bond at secondary market=$800
Current Yield=?
We know,
Current yeld =
Annual Interest Payable on bond∗100
Current Price of Bond
………..(i)
Annual interest payable on bond= Coupon rate* Face value of Bond
=9%*1000 = 0.09*1000 = $90
Putting values at the equation (i) we get,
Current yeld =
90
800
∗ 100 = 11.25%

4. Page | 3
Illustration #02. Bond of face value Tk. 1,000 with a coupon rate of 8% and
present value of Tk. 700 has a maturity period of 5 years. Calculate the yield to
maturity (YTM) on the bond.
Solution:
We know,
YTM =
I+(FV−C) n
⁄
(FV+C) 2
⁄
------------ (i)
Where,
I= Annual Interest
FV=Face value of bond
C= Current price of bond
N=Bond period
YTM=Yield to Maturity
Here Given in the problem,
FV=Face value of bond=Tk.1000
C= Current price of bond=Tk.700
N=Bond period=5 years
I= Annual Interest=8%*1000=Tk.80 [as coupon rate 8% ]
Putting the values at equation (i) we get,
YTM =
80 + (1000 − 700) 5
⁄
(1000 + 700) 2
⁄
=
80 + 300/5
1700/2
=
80 + 60
850
=
140
850
= 0.1647
= 16.47%

5. Page | 4
Illustration #03. Suppose an investor is considering the purchase of a five-year, Rs.
1000 par value bond, bearing the annual coupon rate of interest of 7%. The
investor’s required rate of return is 8 %. What should he be willing to pay now to
purchase the bond if it matures at par?
Solution:
We know,
In case of annual payment of interest,
B0 = ∑
INTt
(1+kd)t
n
t=1 +
Bn
(1+kd)n
------(i)
Where,
B0=Present value of bond
INTt = Amount of interest each year for period of t
Bn = Terminal or maturity value in period of n
kd = required rate of return on bond(%)
n = numbers of years to maturity
Here given,
INTt = Amount of interest each year for 5 years =7%@1000=Tk.70
Bn = Terminal or maturity value in period of n=Tk.1000
kd = required rate of return on bond(%)=8%=.08
n = numbers of years to maturity=5
B0=Present value of bond=?
Putting the values at equation (i) we get,
B0 = ∑
INTt
(1+kd)t
n
t=1 +
Bn
(1+kd)n
= ∑
70
(1+.08)5
5
t=1 +
1000
(1+.08)5
= 70 ∗ 3.993 +1000 ∗ 0.681 (putting values from value factor tables)
= 279.51 + 681
= Rs. 960.51

6. Page | 5
Illustration #04. What is the present value of a 10-year, $1,000 par value bond
with a 10% annual coupon if its required rate of return is 10%?
Solution:
We know,
In case of annual payment of interest,
B0 = ∑
INTt
(1+kd)t
n
t=1 +
Bn
(1+kd)n
------(i)
Where,
B0=Present value of bond
INTt = Amount of interest each year for period of t
Bn = Terminal or maturity value in period of n
kd = required rate of return on bond(%)
n = numbers of years to maturity
Here given,
INTt = Amount of interest each year for 10 years =10%@1000=Tk.100
Bn = Terminal or maturity value in period of n =Tk.1000
kd = required rate of return on bond(%)=10% = 0.10
n = numbers of years to maturity = 10
B0 = Present value of bond =?
Putting the values at equation (i) we get,
B0 = ∑
INTt
(1+kd)t
n
t=1 +
Bn
(1+kd)n
= ∑
100
(1+0.10)10
5
t=1 +
1000
(1+0.10)10
= 100 ∗ 6.1446 +1000 ∗ 0.38554 (putting values from value factor tables)
= 614.46 +385.54
= Rs. 999.00

7. Page | 6
Illustration #05. A 10 years bond of Tk.1000 has an annual rate of interest 12%.
The interest is paid half-yearly. If the required rate of return is 16%, what is the
value of bond?
Solution:
In case of half-yearly payment of interest,
B0 = ∑
1
2
(INTt)
(1+
kd
2
)
t
2n
t=1 + ----- +
Bn
(1+
kd
2
)
2n
Where,
B0=Present value of bond
INTt = Amount of interest each year for year t
Bn = Terminal or maturity value in period of n
kd = required rate of return on bond(%)
n = numbers of years to maturity
Here given,
INTt = Amount of interest each year for 10 years=12%* 1000=Tk.120
Bn = Terminal or maturity value in period of n=Tk.1000
kd = required rate of return on bond(%)=16%
n = numbers of years to maturity=10
B0=Present value of bond=?
In case of half-yearly payment of interest,
B0 = ∑
1
2
(INTt)
(1+
kd
2
)
t
2n
t=1 +
Bn
(1+
kd
2
)
2n
=∑
1
2
∗120
(1+
0.16
2
)
t
2∗10
t=1 +
1000
(1+
0.16
2
)
2∗10
=∑
60
(1+.08)t
20
t=1 +
1000
(1+0.08)20
=60*9.818+1000 ∗ 0.215 (putting values from value factor tables)
=589.08+215
=Tk. 804.08

8. Page | 7
Illustration #06. The government is proposing to sell a 5-years bond of Tk. 1000 at
8% rate of interest per annum. The bond amount will be amortized equally over its
life. If an investor has a required rate of return of 7%, what is the bonds present
value for him?
Solution:
We know,
In case of bond amount amortized or repaid annually over the years,
B0 = ∑
INTt+Bt
(1+kd)t
n
t=1 --------(i)
Where,
B0=Present value of bond
INTt = Amount of interest paid at end ofyear t
Bt = Bond amonut paid at the end of year t
kd = required rate of return on bond(%)
n = numbers of years to maturity
Here given,
Interest rate =8%
kd = required rate of return on bond=7%=.07
n = numbers of years to maturity=5
Bond amount (Tk.1000) will be amortized equally over 5 years i.e 200 per year
From the given information we can produce below table for interest (INTt) and
bond (Bt) flow:
Year
(t)
Bond amount at
the beginning of
the year
Amount of interest paid
at end of the year t
(INTt)
Bond amount
paid at the end
of year t (Bt)
Bond amount
remain at the
end of year t
a B c =.08(interest rate)*b d e=b-d
1 1000 =8%*1000=80 200 800
2 800 =8%*800=64 200 600
3 600 =8%*600=48 200 400
4 400 =8%*400=32 200 200
5 200 =8%*200=16 200 0
Putting the values at equation (i) we get,
B0 = ∑
INTt + Bt
(1 + kd)t
5
t=1

9. Page | 8
B0 =
INT1 + B1
(1 + kd)1
+
INT2 + B2
(1 + kd)2
+
INT3 + B3
(1 + kd)3
+
INT4 + B4
(1 + kd)4
+
INT5 + B5
(1 + kd)5
B0 =
80 + 200
(1 + .07)1
+
64 + 200
(1 + .07)2
+
48 + 200
(1 + .07)3
+
32 + 200
(1 + .07)4
+
16 + 200
(1 + .07)5
B0 = 280 ∗ 0.934 + 264 ∗ 0.873 + 248 ∗ 0.816 + 232 ∗ 0.763 + 216 ∗ 0.713
(putting values from discount value factor table)
B0 = 261.80 + 230.47 + 202.37 + 177.02 + 154.00
B0 = Tk. 1025.66
Illustration #07. An investor intends to buy an equity share of a company from the
secondary market and hold it for one year. He expects to get a dividend of Tk. 2.00
per share next year and would sell the share at a price of Tk. 21 at the end of year.
His required rate of return is 15% on his investment. How much should he pay for
the share today?
Solution:
We know,
In case of single period valuation model,
P0 =
DIV1+P1
1+ke
-----------(i)
Where,
P0 = present value of the share to the investor.
DIV1 = Dividend expected to return at the end of one year
ke = Rate of return expected by the investor
P1 = Expected selling price of return at the end of one year
Here given in the problem,
DIV1 = Dividend expected to return at the end of one year = Tk. 2 per share
ke = Rate of return expected by the investor = 15% = 0.15
P1 = Expected selling price of return at the end of one year = Tk. 21
Putting the values in the equation (i) we obtain,
P0 =
2+21
1+0.15
=
72
1.15
= Tk. 20

10. Page | 9
Illustration #08. An investor desires to purchase the equity share of a company
from the secondary market. The investor prefers to hold the share for a period of
four years and dispose-off the share after four years. He expected to get a dividend
of Tk. 6.00, Tk. 6.50, Tk. 7.50 and Tk. 9.00 per share in the next four years
respectively. He is hopeful of selling the share in the secondary market at a price of
Tk. 120 after the end of four years. He expects a return of 22% on his investment
considering the level of risk associated with it. Calculate the present value of the
share to the investor.
Solution:
We know,
In case of multi-year valuation model,
P0 = ∑
DIVt
(1+ke)t
n
t=1 +
Pn
(1+ke)n
-----------(i)
Where,
P0 = present value of the share to the investor
DIVt = Dividend expected to return at the end of tth year
ke = Rate of return expected by the investor
Pn = Expected selling price of return at the end of nth
year
Here given in the problem,
DIV = Dividend expected to return at the end of 1st, 2nd, 3rd and 4th year are
Tk. 6.00, Tk. 6.50, Tk. 7.50 and Tk. 9.00
ke = Rate of return expected by the investor = 20% = 0.20
P4 = Expected selling price of return at the end of 4th
year = Tk. 120
n = holding years = 4
Considering holding year 4, we obtain the equation (i),
P0 =
DIV1
(1+ke)1
+
DIV2
(1+ke)2
+
DIV3
(1+ke)3
+
DIV4
(1+ke)4
+
P4
(1+ke)4
-----(ii)
Putting the values in equation (ii) we get,
P0 =
6
(1 + .20)1
+
6.50
(1 + .20)2
+
7.50
(1 + .20)3
+
9.00
(1 + .20)4
+
120
(1 + .20)4
= 6 ∗ 1.200 + 6.50 ∗ 1.4400 + 7.50 ∗ 1.7280 + 9.00 ∗ 2.0736 + 120 ∗ 2.0736
(putting values from value factor tables)
= 7.200 + 9.360 + 12.960 + 18.662 + 248.832
= 297.014

11. Page | 10
Illustration #09. A company is expected to pay a dividend of Tk. 4.00 per equity
share for the next year. The dividends are expected to grow perpetually at rate of
12% every year. Estimate the price of share today if the market capitalizes
dividend at 12% for the investor.
Solution:
In case of Dividend perpetual growth model, we know,
P0 =
DIV1
ke − g
− − − − − −(i)
Where,
DIV1 = Dividend expected to return after 1 year
ke = Dividend capitalisation rate
g = Dividend perpetual growth rate
Here given in the problem,
DIV1 = Dividend expected to return after 1 year = Tk. 4
ke = Dividend capitalisation rate = 12% = .12
g = Dividend perpetual growth rate = 8% = .08
Putting the values in the equation (i), we obtain,
P0 =
4
0.12 − 0.08
=
4
0.04
= Tk. 100

12. Page | 11
Illustration #10. A company’s share is currently selling for Rs 50 per share. It is
expected that a dividend of Rs 3 per share and a price of 52 will be obtained at the
end of the one year. Calculate the rate of return? Should the share be purchased?
Solution:
We know,
re =
DIV1
P0
+
P1 − P0
P0
Where,
re = expected/required rate of return
DIV1 = Expected dividend at end of one year = Rs 3
P0 = Current price of share=50
P1 = Price of share at end of one year
Here given in the problem,
DIV1 = Expected dividend at end of one year = Rs 3
P0 = Current price of share = Rs 50
P1 = Price of share at end of one year = Rs 52
Putting the values in the equation (i) we obtain,
re =
3
50
+
52 − 50
50
=
3 + 52 − 50
50
=
5
50
= 0.10 = 10%
The share can be purchased if the investor’s required rate of return is equal to or
less than 10%.