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  • Icwa Business Valuation Management CC Papers

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    This document provides sample problems and solutions for a business valuation management test paper. It includes 5 questions with multiple parts each that cover topics like: - Calculating the present value of future dividends from a stock and determining its current share value - Calculating reorder levels, minimum levels, and average levels for inventory management - Determining financial leverage ratios and calculating net operating profit, cost of capital, and economic value added - Citing page numbers from course materials for additional reference on various valuation and inventory management techniques.

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    Icwa Business valuation management cc papers

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    Icwa Business Valuation Management cc papers

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    This document provides sample problems and solutions for a business valuation management test paper. It includes 5 questions with multiple parts each that cover topics like: - Calculating the present value of future dividends from a stock and determining its current share value - Calculating reorder levels, minimum levels, and average levels for inventory management - Determining financial leverage ratios and calculating net operating profit, cost of capital, and economic value added - Citing page numbers from course materials for additional reference on various valuation and inventory management techniques.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    72 views2 pages

    Icwa Business Valuation Management CC Papers

    Uploaded by

    Dina
    This document provides sample problems and solutions for a business valuation management test paper. It includes 5 questions with multiple parts each that cover topics like: - Calculating the present value of future dividends from a stock and determining its current share value - Calculating reorder levels, minimum levels, and average levels for inventory management - Determining financial leverage ratios and calculating net operating profit, cost of capital, and economic value added - Citing page numbers from course materials for additional reference on various valuation and inventory management techniques.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 2

    Business Valuation Management

    Test Paper 2

    1 Institute material Pg 2, Pg 18, Pg 19


    2 A) Pg 15
    B)

    Year Dividend Discount factor Present Value


    1 1.68 0.862 1.448
    2 1.88 0.743 1.397
    3 2.07 0.641 1.327
    4 2.28 0.552 1.258
    CV# 30.75 0.552 16.974
    Present Value of dividends & terminal value 22.404
    is

    5th Year Dividend is 2.28 * 1.08 = 2.46


    Capitalization Rate = (Ke – g) = 0.16 – 0.08 = 0.08
    Terminal Value = 2.46 / 0.08 = 30.75

    Current share value is Rs. 22.40/ share

    3a, pg 117 Pg 138

    b Reorder level = max. Consumption * max reorder period


    140*30
    4200
    Minimum level = Reorder Level – Average Consumption * Average Reorder
    Period
    = 4200 - 110 * 27.5
    = 1175
    Maximum level = Reorder Level + Reorder Qty - (Min consumption * Min
    reorder period)
    = 4200 + 5000 - (50*25)
    = 7950
    Average level 1/2 (Max. level + Min level)

    = 7950 + 1175
    2
    = 4562
    4a Financial leverage = EBIT/ EBT
    = EBIT/ EBIT - I
    1.4 = EBIT
    EBIT – 40

    1.4 (EBIT – 40) = EBIT


    0.4 EBIT = 56
    EBIT = 140
    NOPAT = 140 (1- 0.3)
    = 98

    Cost of capital = (300/700) * 0.175 + 400/700 (0.1 – 0.03)


    = 11.5 %

    Economic value added = 98 – (700 * 11.5%)


    = 17.5 lakhs

    5 a. Pg 136
    b. Pg 138
    c. Pg 183

    8 a. Pg 136
    b. Pg 200
    c. Pg 30

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