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UNIVERSITY EXAMINATIONS
OCTOBER/NOVEMBER 2025
EXAMINATION
FIN3701
Financial Management
70 marks
Duration: two hours
First examiner: Dr LP Mamaro
Second examiner: Mr
MN Bhomoyi External
examiner: Prof J Hall
Instructions
This examination is timed. You must complete the
examination and submit your answer script within the
allocated time. The allocated time accommodates this
process.
All work you submit for the examination must be your own.
Your submission may be checked for plagiarism.
Print out the examination paper, write your answers on it
and then scan and upload your completed paper. If the space
provided is insufficient, you may use additional sheets of
paper. Ensure that you scan and upload the pages in the
correct sequence.
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Page 3 of 28
FIN3701
OCT/NOV 2025
Submit the examination in the same way you submitted your
assignments on myUnisa.
This examination paper consists of 28 pages, which include
an invigilator code on page 3, four pages for rough work
(pages 21-24), Appendix A (interest tables) on pages 25-28
The examination consists of four questions, all of which
must be answered. Show all your calculations clearly.
Note that rough work will not be marked.
QUESTION 1 [10
marks]
Mahlako Kate is the chief financial officer (CFO) of Computron
Industries, a manufacturer of electronic calculators. As a financial
management graduate, you are expected to assist the CFO with
financial analysis. In recent years, Computron Industries has been
constrained by the high cost of capital, limiting its ability to pursue
new investments. Kate is interested in determining the company’s
overall cost of capital and has provided you with the following data,
which she believes will be relevant to your analysis:
Ordinary shares (60%): Ordinary shares are currently trading at
R12 per share. An ordinary dividend of R1,50 per share was recently
paid, and dividends are expected to grow at 10% per annum for the
foreseeable future.
Preference shares (20%): Preference shares are currently trading
at R1,50 per share. The company is expected to pay dividends of
R0,12 per share in the next financial year, and flotation costs will
amount to R0,12 per share.
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Long-term debt (20%): R1 000,00 par value, 10% coupon rate and
five-year bonds that could be sold for R1 200,00, will be issued with a
flotation cost of R25,00 per bond.
The company tax rate is currently 28%.
REQUIRED
1.1 Using the information provided above, calculate the weighted average
cost of capital
(WACC) for the company. (10
marks)
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, lOMoAR cPSD| 52021443
UNIVERSITY EXAMINATIONS
OCTOBER/NOVEMBER 2025
EXAMINATION
FIN3701
Financial Management
70 marks
Duration: two hours
First examiner: Dr LP Mamaro
Second examiner: Mr
MN Bhomoyi External
examiner: Prof J Hall
Instructions
This examination is timed. You must complete the
examination and submit your answer script within the
allocated time. The allocated time accommodates this
process.
All work you submit for the examination must be your own.
Your submission may be checked for plagiarism.
Print out the examination paper, write your answers on it
and then scan and upload your completed paper. If the space
provided is insufficient, you may use additional sheets of
paper. Ensure that you scan and upload the pages in the
correct sequence.
Downloaded by Master Vincent ()
, lOMoAR cPSD| 52021443
Page 3 of 28
FIN3701
OCT/NOV 2025
Submit the examination in the same way you submitted your
assignments on myUnisa.
This examination paper consists of 28 pages, which include
an invigilator code on page 3, four pages for rough work
(pages 21-24), Appendix A (interest tables) on pages 25-28
The examination consists of four questions, all of which
must be answered. Show all your calculations clearly.
Note that rough work will not be marked.
QUESTION 1 [10
marks]
Mahlako Kate is the chief financial officer (CFO) of Computron
Industries, a manufacturer of electronic calculators. As a financial
management graduate, you are expected to assist the CFO with
financial analysis. In recent years, Computron Industries has been
constrained by the high cost of capital, limiting its ability to pursue
new investments. Kate is interested in determining the company’s
overall cost of capital and has provided you with the following data,
which she believes will be relevant to your analysis:
Ordinary shares (60%): Ordinary shares are currently trading at
R12 per share. An ordinary dividend of R1,50 per share was recently
paid, and dividends are expected to grow at 10% per annum for the
foreseeable future.
Preference shares (20%): Preference shares are currently trading
at R1,50 per share. The company is expected to pay dividends of
R0,12 per share in the next financial year, and flotation costs will
amount to R0,12 per share.
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Long-term debt (20%): R1 000,00 par value, 10% coupon rate and
five-year bonds that could be sold for R1 200,00, will be issued with a
flotation cost of R25,00 per bond.
The company tax rate is currently 28%.
REQUIRED
1.1 Using the information provided above, calculate the weighted average
cost of capital
(WACC) for the company. (10
marks)
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