RNS INSTITUTE OF TECHNOLOGY MBA Department Security Analysis and Portfolio Management I - Internal Examination Sub.

code: 10MBAFM322 Answer all the questions 1. a. What is the role of underwrites in primary issue? (3 ) Marks: 50

b. How can you differentiate an investor from the speculator, in the stock market? (7) c.Consider the data for sample of 4 shares for two years, the base year and year t. (10) Share Price in base year(Rs) A B C D 40 60 20 75 30 75 40 90 Price in year t No. of shares outstanding 3 12 6 5

Calculate the equal weighted index, Price weighted index and Value weighted index. 2. a. What do you mean by sweat equity? Explain with example (3)

b. Discuss the attribute that one should consider while evaluating an investment. (7) c. The following data is available for a bond Face value Coupon rate Years to maturity Rs.100 12% payable annually 6 years (10)

Current market price Rs.110

What is the yield to maturity, duration and volatility of this bond? 3. Zenith Company is currently paying a dividend of Rs.1.50 per share. The dividend is expected to grow at a 12% annual rate for 3 years, then at 8% to grow next 3 years, after which it is expected to grow at 5% rate forever. What is the intrinsic value of the share if the capitalization rate is 14%? (10)

RNS INSTITUTE OF TECHNOLOGY MBA Department Mergers Acquisitions and Corporate Restructuring I - Internal Examination Sub.code: 10MBAFM323 Answer all the questions Marks: 50

2. a. What do you mean by synergy? b. Distinguish between mergers and acquisitions c. Discuss the motives behind mergers and acquisitions 3. Explain the theories of mergers