a
il:{ ! j'i
ffiNHfiruXU pG - 872
ll $ameotcr il!.8.& Oogroc fxamlnarlJn, Juty Z0lr
{cBcs}
ilAHA&Etl[S]tT
2,5 I Flaansirl lttsnsg€tfiBnt
Tirne; 3 Ha*rs
M*x, M*rkx: lQ
lnstlr:us$on : Answer s$ tfia$6c{i}ns,
sEsTr0f{*A
Answrr rny flvsol the tottswtng quertions. E*ah qresrff fantasi mades. (sxr*ssl
1' r.rh€n san lhare a*se e conrict betwesn Eharahddsrt,6nd ffiSnasers'goals
* ? - *
Htttr can lt be resolvsd ? //
2. Erlotly *xgain the leatures ol Venlure Capital,
3. Explain th* fact*rs lrsuerxlng dvidsnd polfsy.
4_ The earnings per *hare of a eompafiy ar8 fi$. 10. ll ha3 an hlsmal
rets sf rerum
of l$% and ths cast*t,:str6rr ratB d fif ri*k sh*s ls t!,5?o" r wsrbr-s
model ls
used;
i) $Ihet ehoutdtfte oplimum psyout rs$o of ths filTn ?
ii) What nould bq the prlce o{ }h6 thars ft t}rts pslro{ri ?t
F-e^'r.'--r
I
5. Aarumlng that r lirm p*y$ tflx al a 4s16' tix rutB, computs
lh6 sltar tsx eost a,
6*pital ln thelollo*ipg ca$s€ :
a) A hond, sold al As. tOo wtttr s 7 peruent interast and 0 r*dernpds* prlce
R$. 1 t0, il lhe aompany r*deerns It in f y6er$,
d
b) An ordtnary share. seffrng or & curronr msrft€t prico cd Fls. t t0 and paying
a
cunent dtvkend d Hs. g pCIr shas, nfrhh b s)qpsgtd t0 gr,o* at * rati of s t
s fi*o corporatl*n has s rarget capttL srrucrure sf $q$ squ}ly arrf 4*1i
dsht, It$
equtty k_r 8of ano ils pmlrar cost or debi is 13%. I ths rel€vsn
3rlg
ts 357o, what ls Bao
tax rBte
Coporatlon,sw66g 7
L ExBifflfi th6 r+le #, ilnanco *anrgl, rn the shdngrog $*frnsfio of flrmnciet
m*nagaraaniln lodin.
p,T.0.
PG*8?2 ",. IffiTXBHHilI
s€*TtoN*B
*nswrrenytfirooolthsrotlowin$.rachqueetionctrlaelanmarks. (r0rcg*s0l
8. "Finarua tunctlon ol r hrsl***t lxelossly rrlated lc lts othsrfuoctlsns*" Sleeug$
willr suit*bte off mples.
*, Anrn's$ffltr.vert*Hemst*andftxadcostarnounrrcFls,75,00,000,Rs.rtAS0,000
end fis. 6,00.SS0 rs*pectivnty. lt has bt:notrred ns, h$,00.000 at g persflt a$d
it* *qully cspital lstals Ha. 5$,0S.000.
al What ts lh$ {irrn'$ fiOI ?
bi Oo*s lt have a lav*rnHs finsoclal lavErago ?
c) ll ttle ftrm belongs io an industry fiftoss asset turfisvsr ir 3. doe* lt tavs c
hish sr low a$$&t lever*ge ?
d| What ur lhe ep*rating. llnaneial and cofibinsd lever&ges of th6 Sffi ?
e| ll the sates drop to F*, 50,0o,000. $h*t rylil s16 *6$ EBIT he ?
l| At wh*t bvsl wlll Srn EST of ltte fnn aquat lo raro ?
10. JKL UtrCl€d Is ensidedtq thi reuisloft of ffr* crsd{{ po{iry wfdr a vbw lo lrrreasing
it* ealee and prcliL Currantty all lt* sales 816 ori cradii uftd th* cu*tornars arg
givdn ons ffionlh's t,*rs ts 8€{1ls ths dr.es" x ha* a ca'nffbuffofi ol 40?6. ort sal6$
ard it can ral$s addltioflal tunds al a csel al *i/a per anhum" Th* rna{<otlng
rnarsgsr a, ths csnpeny ha* gtve* th* fcllo*lrq oplion$ alonB with gstlfnste$
iorconfidsrstiona :
Prilculcr* GurrentForltlon Optiqnl Spilonll Op$anlll
Sales{intirktr Rs.} 20* 310 ru ffi
Cr*ditpsri*d{1nm*nths}}X.SZg
8sd dsht$ fA sal6*}
CI{ e 2.S B s
Cosl sl cr*dlt *dl$inlslr*tlon
{Jn ns. Lakh$} 1efi 1.36 {-$S 9.00
Ycu are re{illred loadvlse the Wrupariy lor lhs he$t opthtfr.
{ii'r r1 rielii.-l.t'.n
llffiffisffisr i3 FG*8?2
.t
1 t. A pr*f*rm* fo$l6hs*'l sl & csmp8ny pr*rldes tho lolbwlng parlicular$ :
Amount par unlt$
A*wmetsrial s
Dlrxrl latrcur s
Ovsttffiade ff
Tolat eosl 1?0
Prs{il fi
Satllng prico 200
Ttu tollowrng {urlh*r Fartkulart are amitabls. Flsw maleriats *re in *t*ck on an
average lor one month, lVlF on an average leir hatl a manth. Finished gocds are
in slock on ar1 svsrag€ lor ana rno{tth.
Credil allowst by supplior$ is one monlh, cradrl allovred to custorneffi i* tno
mofittts. Lag in paymonl of wages is 1lrr weoks { ! .5}, lag in payment of overhead
exp6ns€$ i$ on6 nofilh. O*e-lorth ol lle outpul is sold against ca$h, c&sh ln
hand and al bank is erpecled to be ? 25.000, You are raquired {a prepars s
$tatamelt shoriling 8!e worfting captlsl needed to {ioance a hyel Ot activlly ol
1 .04,00Q units ol produrlion. Yul tnay assuns th6t
Froductim ts cani*d CIfl evsoty
thrcugrhoul th6 y66r, wagas and overfisads accrue similarly snd * time pcrhd ol
4 waaks is aqutvalcnt to a mofith.
sEcTroN* c
12. Computscryquestlon :
{1xl5n15}
Casn *tudy, ,l
You ars a flnanoi$ arlalyBtlor Hllssh Ca" Ltd. The CIirsclcrotcapltalbudgeting
has asked you to analyie thettvo pmpossd csplt&l lnve$mens, fiof*cti aot
Frqed Y. Each txoi$ct hs8 s cost o{ fis. 2 mlfiion and lhe cost ol capit8t lor
each prqact is 1 2Ya. The proleefs expeclad prdil balare Uoprecistion and t*xs$
flfe :
Yasr { proFa X(pBtrT} prolgcty(Fasn
1 ii e,oo.ooo ts.oo.ooo
r s.00,00s ,s_00.s00
*/ls,oo,ooos,oo,oao
4 l[i s.oo.ooo g,oo,ooo
ei Calcttlals Pay,i}*ch Periad. Nsr/present Value and Prolitrbillty Ind*x"
b) Whi*h 6:ro{ecUprdec{* shnuld be acceptsd t{ tiey ar6 hdep€nd€r* ?
