lOMoAR cPSD| 48433225
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CONFIDENTIAL FIN4801
Page 2 of 11 JANUARY / FEBRUARY 2026
UNIVERSITY EXAMINATIONS
JANUARY / FEBRUARY 2026
FIN4801
Advanced Financial Management
100 Marks
Duration: 4 Hours
Examiners:
Primary: Dr PN Kotze Secondary : Mr AM
Phenya External examiner: Ms P Segodi
(WITS)
Instructions:
• This paper consists of eleven (11) pages, including appendix A
(financial tables on pp 8– 11).
• This examination is an assessment. It should therefore be
your own work and you must remember to tick the
Declaration of Honesty.
• Answer ALL the questions.
[TURN OVER]
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CONFIDENTIAL FIN4801
Page 3 of 11 JANUARY / FEBRUARY 2026
• Show all your calculations clearly and label your answers in
accordance with the examination paper.
• Your answers must be typed. You can use + - / * and ( ) as
mathematical operators where necessary. You do not need to
use the equation editor.
• Use The Invigilator application as per the instructions. This is
compulsory.
• Remember to save your document as a PDF file before
submitting it.
• Submit your answers on myExams.
• Start submitting your answer file as soon as the writing time
for the paper has come to an end (after four hours). Do not
use your upload time to answer the paper.
• Ensure that your answers are uploaded on time.
• Contact us immediately if you experience any issues during
the examination or with uploading your answer file.
• Plagiarism checks will be run on your submission using
Turnitin and The Invigilator application. In addition, manual
checks will be done.
[TURN OVER]
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CONFIDENTIAL FIN4801
Page 5 of 11 JANUARY / FEBRUARY 2026
QUESTION 1 [10 MARKS]
Question 1.1 (4 Marks)
Consider, in terms of capital structure theory, the following graph of a
firm’s borrowing over the four most recent years:
12
10
8
6
4
2
0
2022 2023 2024 2025
Debt (in R billion) Interest rate (%) Cost of equity (%)
Assume the company has not issued any new equity in this period.
Which capital structure theory do you think is most applicable here?
Explain your answer. (Choose and explain only the most applicable
theory.)
Question 1.2 (3 Marks)
Beta is often used to determine the level of risk in publicly listed
companies as it enables the calculation of the cost of equity using the
CAPM. Explain how best to account for risk in the cost of equity of a
private African/South African company where no beta is available.
Question 1.3 (3 Marks)
[TURN OVER]
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Downloaded by Vincent master
, lOMoAR cPSD| 48433225
CONFIDENTIAL FIN4801
Page 2 of 11 JANUARY / FEBRUARY 2026
UNIVERSITY EXAMINATIONS
JANUARY / FEBRUARY 2026
FIN4801
Advanced Financial Management
100 Marks
Duration: 4 Hours
Examiners:
Primary: Dr PN Kotze Secondary : Mr AM
Phenya External examiner: Ms P Segodi
(WITS)
Instructions:
• This paper consists of eleven (11) pages, including appendix A
(financial tables on pp 8– 11).
• This examination is an assessment. It should therefore be
your own work and you must remember to tick the
Declaration of Honesty.
• Answer ALL the questions.
[TURN OVER]
Downloaded by Vincent master ()
, lOMoAR cPSD| 48433225
CONFIDENTIAL FIN4801
Page 3 of 11 JANUARY / FEBRUARY 2026
• Show all your calculations clearly and label your answers in
accordance with the examination paper.
• Your answers must be typed. You can use + - / * and ( ) as
mathematical operators where necessary. You do not need to
use the equation editor.
• Use The Invigilator application as per the instructions. This is
compulsory.
• Remember to save your document as a PDF file before
submitting it.
• Submit your answers on myExams.
• Start submitting your answer file as soon as the writing time
for the paper has come to an end (after four hours). Do not
use your upload time to answer the paper.
• Ensure that your answers are uploaded on time.
• Contact us immediately if you experience any issues during
the examination or with uploading your answer file.
• Plagiarism checks will be run on your submission using
Turnitin and The Invigilator application. In addition, manual
checks will be done.
[TURN OVER]
Downloaded by Vincent master
()
, lOMoAR cPSD| 48433225
CONFIDENTIAL FIN4801
Page 5 of 11 JANUARY / FEBRUARY 2026
QUESTION 1 [10 MARKS]
Question 1.1 (4 Marks)
Consider, in terms of capital structure theory, the following graph of a
firm’s borrowing over the four most recent years:
12
10
8
6
4
2
0
2022 2023 2024 2025
Debt (in R billion) Interest rate (%) Cost of equity (%)
Assume the company has not issued any new equity in this period.
Which capital structure theory do you think is most applicable here?
Explain your answer. (Choose and explain only the most applicable
theory.)
Question 1.2 (3 Marks)
Beta is often used to determine the level of risk in publicly listed
companies as it enables the calculation of the cost of equity using the
CAPM. Explain how best to account for risk in the cost of equity of a
private African/South African company where no beta is available.
Question 1.3 (3 Marks)
[TURN OVER]
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