(2 Hours) (Total Marks: 75) Instructions: All Questions Are Compulsory

38 3A 2A 9F E2 2E 7C 15 A 7F
C
82 23A 2A 9FE E2C 2E 7C1 15E EA6 67F3 332
3 2 9 2 7
23 A2 A9 FE2 2C2 E7 C15 5EA A67 7F33 32D D6C
A2 A9 FE C E7 C1 E 6 F3 2D 6C A
A2 A9 FE 2C 2E7 C1 5E A6 7F3 32D 6C A E73
F 2 2 5 A 7 3 E 8
2A A9F E2C C2E E7C C15 EA 67F F33 2D6 6CA AE7 738 23A
E E 6 2 2
A9 9FE 2C 2E7 7C1 15E A6 7F3 332 D6C CA E73 382 3A 2A9
2 2 A 7
F C E C 5E 6 F 32 6 A 7 8 A 2A F D E 3
FE E2C 2E 7C1 15E A6 7F3 332 D6 CA E73 382 23A 2A 9FE E2C
7 7 D C E 3 2 9
E2 2C2 2E7C C15 5EA A67 F33 32D 6C AE 738 823 A2 A9F FE2 2C2 2E7
C E E 6 F 2 6 A 7 2 A A E C
68409
2C 2E 7C 15E A6 7F 332 D6 CA E7 382 3A 2A 9FE E2C C2E 7C 15E
2E 7C 15E A6 7F 332 D6 CA E7 382 3A 2A 9F 2C 2E 7C 15E A6
2E 7C 15E A6 7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A6 7F
E
E7 7C1 15EA A67 7F3 332D D6C CAE E73 3823 3A2 2A9 9FE 2C 2E7 7C1 15E A67 7F3 332D
5 3 8
C1 E 6 F3 2 6C A 73 2 A A9 FE C 2E C1 5E A6 F3 32 6 2
higher returns.
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C 2E 7C 5E A6 7F 32 D6 CA
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2E 7C 15E A6 7F 332 D6 CA E7
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A 7F 332 D6 CA E7 38
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 23A
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
6C AE 73 823 A2 A9 FE C2 E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9
AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A2 A9 FE
73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2 A9 FE 2C
82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A FE 2C 2E
3A 2A 9F 2C 2E 7C 5E A 7F 32 D6 CA E7 38 3A 2A 9F 2C 2E 7C
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9F E2 2E 7C 15
9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F E2 C2E 7C 15 EA
Q1A] Fill in the blank [Any 8]
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E C2 E7 C1 EA 67 F3
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C 2E C1 5E A6 F3 32 6
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Instructions: All questions are compulsory.
bills and invoices and their respective due date .

2] IRR method ignores the time value of money.

(2½ Hours)
2] Risk and ---------------- always goes hand in hand
10] When interest rate rise bond price also increases .

Page 1 of 5
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
3] Overcapitalization does not have any adverse effects.

10] An improper analysis leads to ------------- of project.
8] Bad debts are not accounted for under recourse factoring.

3] Capital rationing helps in --------------- shareholders wealth.

2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
32D6CAE73823A2A9FE2C2E7C15EA67F3
7] Unsystematic risk reduces with the diversification of investment.
Q1B] State Whether following statements are true or false . [Any 7]
1] Default Costs are caused due to failure of customers to pay on time .

6] Units of Mutual Fund have a similar connotation as shares of a company

E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
4] ----------------- costs are irrelevant in determining the cash flows of a project.
Paper / Subject Code: 44804 / Financial Management - II
9] Shareholder wealth in a firm is represented by ----------- of firms common stock.
9] Corporate Strategy is hierarchically the highest strategic plan of the organisation.

5] In case sales are subject to wide fluctuations a firm should employ more -------------

8] Dividend declared between two Annual General Meetings is termed as ----------------
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 2
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23
6C AE 73 823 A2 A9 FE C2 E7 C1 5EA 67 F3 32D 6C AE 73 823
7] Bonds which has an issue price equal to its face value is known as issued at ---------------
AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A

1] ---------------- determines the number of years required to recover initial investment outlay.
[Total Marks: 75]
(07)
(08)
73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

6] The type of expenses that can be charged to a fund and the limit is decided by -----------------
82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A
3A 2A 9F 2C 2E 7C 5E A 7F 32 D6 CA E7 38 3A 2A
5] An aging scheduled is an accounting table that shows the relationship between a company
4] Dividends paid to the shareholders are always reinvested by all the shareholders further, to get
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9
9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E
33 D CA E 38 3A 2A 9F E2 2 7
2D 6C E 73 23 2 9 E2 C2 E7
8 F
38 3A 2A 9F E2 2E 7C 15 A 7F
C
82 23A 2A 9FE E2C 2E 7C1 15E EA6 67F3 332
3 2 9 2 7
23 A2 A9 FE2 2C2 E7 C15 5EA A67 7F33 32D D6C
A2 A9 FE C E7 C1 E 6 F3 2D 6C A
A2 A9 FE 2C 2E7 C1 5E A6 7F3 32D 6C A E73
F 2 2 5 A 7 3 E 8
E E 6 2 2
2 2 A 7
F C E C 5E 6 F 32 6 A 7 8 A 2A F D E 3
7 7 D C E 3 2 9
are.
C E E 6 F 2 6 A 7 2 A A E C
68409
dividend.
E
company .
5 3 8 2
IRR
recommend?
C1 E 6 F3 2 6C A 73 2 A A9 FE C 2E C1 5E A6 F3 32 6
interest per annum.

interest per annum.
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Cost of Capital
Retention Ratio
Earning Per share

Dividend per share

E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
implication of Financial Leverages.

lakhs. All cash sales no credit sales .
I] Entirely through ordinary shares .

OR
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
and variable cost is @50% and net profit is @20%.

Page 2 of 5
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
Q2B] Calculate the market price of share as per Walter model
Rs 5
Rs 3
16%
20%
50%

2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
sales will be Rs 30 lakhs .chances of bad debts @2% of the credit sales .
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
Mr. Patel has put forward the following two proposals before the management.
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 2
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23
[5]
[15]
[10]

82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A
IV] Rs.10 lakhs through ordinary shares and Rs. 10 lakhs through Preference shares with 5%
At present the sales price per unit is Rs. 20 and present age of account Receivable is a one month
consisting of 25000 shares of Rs.100 each . the Management is planning to raise another Rs 20
corporate tax of 50 %. Determining EPS in each alternative and comment on the financial
II] Rs.10 lakhs through ordinary shares and Rs. 10 lakhs through long term borrowing at 8%
III] Rs.5 lakhs through ordinary shares and Rs. 15 lakhs through long term borrowing at 9%
appointed Sales Manager has ambitious plan to increase the sales and also the profitability of the
Proposals :- Reduced the selling price by 5% per unit. The expected sales would be Rs. 28.50
Assuming that the cost of funds is 12 % and other conditions remaining same which would you
lakhs to finance major programme of expansion through one of four possible financing the plans
Proposals I :- increase the credit period to debtors from one month to 3 months. The expected
The company expected earning before interest and taxes [EBIT] will be Rs 8 lakhs .Assuming
Q2C] Arshi Rukshar company has currently, an ordinary share capital of Rs 25 lakhs,
Q2A] Preet Industries Ltd .has annual credit sales of Rs 24. Lakhs. Mr. Raza Patel,the newly
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E
33 D CA E 38 3A 2A 9F E2 2 7
2D 6C E 73 23 2 9 E2 C2 E7
8 F
38 3A 2A 9F E2 2E 7C 15 A 7F
C
82 23A 2A 9FE E2C 2E 7C1 15E EA6 67F3 332
3 2 9 2 7
23 A2 A9 FE2 2C2 E7 C15 5EA A67 7F33 32D D6C
A2 A9 FE C E7 C1 E 6 F3 2D 6C A
A2 A9 FE 2C 2E7 C1 5E A6 7F3 32D 6C A E73
F 2 2 5 A 7 3 E 8
E E 6 2 2
2 2 A 7
F C E C 5E 6 F 32 6 A 7 8 A 2A F D E 3
7 7 D C E 3 2 9
E F A A A
Life
C E 6 2 6 7 2 E C
Cost
68409
Year 1
7
6
5
4
3
2
E
5 3 8 2
value Rs 100
Cash in hand
C1 E 6 F3 2 6C A 73 2 A A9 FE C 2E C1 5E A6 F3 32 6
Present index
per unit basis.
Profit After Tax

Dividend Accrued
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
securities are at cost.

Expenditure Accrued
a] Payback period
Amount payable on share

No. of units (Rs. 10 Each )

Bonds and debentures at costs
II] The Cost of Capital is 10 %

E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
Listed Shares at costs[ ex dividend]
b] ARR
----
----
Other fixed interest securities at cost
Of these , bonds not listed and quoted
12000
24000
42000
12000
12000
5 years
400000
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Machine X
c] NPV
The listed share were purchased when index was
3A 2A 9F 2C 2E 7C 5E A 7F 32 D6 CA E7 38 3A 2A 9F 2C 2E 7C Value of listed bonds and debenture at NAV date
Page 3 of 5
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
OR
III] PVIF factor at 10%.

10000
10000
10000
20000
40000
40000
10000
7 years
560000
8
20
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
2.00
0.75
6.32
0.80
4.50
1.00
4.30
1.23
Machine Y
2300
1000

Current realizable value of fixed income securities of face 106.5
I] profit is calculated after deducting straight line depreciation and tax

d] Profitability Index
following information, suggested which of the two is recommended under
Rs. In lakhs

E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
IV] Depreciation for both the machine X and Y Rs 80000 per annum respectively
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 2
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23
Q3] Hero is considering a purchase a machine X and Y are the 2 machine available from the

[5]
bond is currently selling at Rs 910 .what is the yield to maturity in the investment of this bond
[15]
[10]

82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A
There has been a diminution of 20% in unlisted bonds and debentures .other fixed interest
Q3A] Based on the following information, determine the NAV of a regular income schemes on
Q3B] A Bond of Rs 1000 has a coupon rate of 8%per annum and Maturity period of 3 years. The
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E
33 D CA E 38 3A 2A 9F E2 2 7
2D 6C E 73 23 2 9 E2 C2 E7
8 F
38 3A 2A 9F E2 2E 7C 15 A 7F
C
82 23A 2A 9FE E2C 2E 7C1 15E EA6 67F3 332
3 2 9 2 7
23 A2 A9 FE2 2C2 E7 C15 5EA A67 7F33 32D D6C
A2 A9 FE C E7 C1 E 6 F3 2D 6C A
A2 A9 FE 2C 2E7 C1 5E A6 7F3 32D 6C A E73
F 2 2 5 A 7 3 E 8
E E 6 2 2
2 2 A 7
F C E C 5E 6 F 32 6 A 7 8 A 2A F D E 3
7 7 D C E 3 2 9
C E E 6 F 2 6 A 7 2 A A E C
68409
E
5 3 8
6
5
4
3
2
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C 2E 7C 5E A6 7F 32 D6 CA 1
Use M.M. Model

Project
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Face Value = Rs 1000

II] Dividend is declared?

project are [a] indivisible
Yield To Maturity = 12%

Years to Maturity = 5 years
I] Dividend is not declared?

Redemption value = Rs1000
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
Current Market Price = Rs 1036

75000
Coupon Rate (payable Annually) =13 %

200000
100000
225000
175000
150000

Outflow
[b] divisible
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Page 4 of 5
OR
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
and associated profitability index have been determined .

1.05
1.20
1.18
1.20
0.95
1.22
What will be market price of the share at the end of year if.
index
Q4B] Calculate the duration of Bond from the following details.
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Profitability
financial year. The capitalization rate for the same class of company is 12%
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
investment of Rs 10,00,000 during the project , how many new shares must be issued ?
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 2
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23
[8]
[7]
[8]

82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A
Q4A] Preet ltd has Rs 500000 allocated for capital budgeting purposes. The following proposals
Which of the above investment should be undertaken in order to maximize NPV assume that the
quoted at par. The company proposes declaration of dividend of Rs 10 per share at the end of
Assuming that the company pays the dividend and has net profits of Rs 500,000 and makes new
Q4C] Raza Ltd. has capital of Rs 100000 in equity shares of Rs 10 Each .the shares are currently
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E
33 D CA E 38 3A 2A 9F E2 2 7
2D 6C E 73 23 2 9 E2 C2 E7
8 F
38 3A 2A 9F E2 2E 7C 15 A 7F
C
82 23A 2A 9FE E2C 2E 7C1 15E EA6 67F3 332
3 2 9 2 7
23 A2 A9 FE2 2C2 E7 C15 5EA A67 7F33 32D D6C
A2 A9 FE C E7 C1 E 6 F3 2D 6C A
A2 A9 FE 2C 2E7 C1 5E A6 7F3 32D 6C A E73
F 2 2 5 A 7 3 E 8
E E 6 2 2
2 2 A 7
F C E C 5E 6 F 32 6 A 7 8 A 2A F D E 3
7 7 D C E 3 2 9
M3
M2
M1
C E E 6 F 2 6 A 7 2 A A E C
68409
I] EVA
2E 7C 15E A6 7F 332 D6 CA E7 382 3A 2A 9F 2C 2E 7C 15E A6 Machine
E
5 3 8
V] 5Cs of credit.
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
II] Ageing schedule.

IV] EBIT–EPS Analysis.

5
the purchase of a machine.
-3
-10

Poor

E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
III] Modigliani- Miller Approach

Q5C] Write a short note [Any 3 ]

5
7
10
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
Fair

Page 5 of 5
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
20
15
11

Good
______________________
Q5A] Explain in brief Responsibility of a Chief Financial Officer
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23 2
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F E2 C2 7 15 EA 67
Market being poor, fair and good at a chance 20%, 50% and 30% respectively.
B] Explain the Relevance of capital rationing in capital budgeting of a firm .
33 D CA E 38 3A 2A 9F E2 2 7C 15 A 67F 33 D C E 38 2
2D 6C E 73 23 2 9 E2 C2 E7 1 EA 67 3 2D 6C AE 73 23
[8]
[7]
[7]
[15]

82 A A FE 2C E C1 5E 6 F3 32 6 A 7 82 A A
Q4D] Construct the decision tree for the following problem and choose the best alternative for
2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F
E2 C2 7C 15 EA 67 33 2D 6C E 38 23 2 9F
C2 E7 1 EA 67 F3 2D 6C AE 73 23 A2 A9 E
E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2
C1 5E 6 F3 32 6C A 73 82 A A9 FE 2C
5E A6 7F3 32 D6 A E7 82 3A 2A FE 2C
A6 7F 32 D6 CA E7 382 3A 2A 9F 2C 2
7F 332 D6 CA E7 382 3A 2A 9F E2C 2E
33 D CA E 38 3A 2A 9F E2 2 7
2D 6C E 73 23 2 9 E2 C2 E7
8 F

(2 Hours) (Total Marks: 75) Instructions: All Questions Are Compulsory

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(2 Hours) (Total Marks: 75) Instructions: All Questions Are Compulsory

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38 3A 2A 9F E2 2E 7C 15 A 7F

AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A2 A9 FE

bills and invoices and their respective due date .

2] IRR method ignores the time value of money.

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9F E2 2E 7C 15

10] When interest rate rise bond price also increases .

3] Overcapitalization does not have any adverse effects.

8] Bad debts are not accounted for under recourse factoring.

7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A 7F 332 D6 CA E7 38

1] Default Costs are caused due to failure of customers to pay on time .

6] Units of Mutual Fund have a similar connotation as shares of a company

9] Corporate Strategy is hierarchically the highest strategic plan of the organisation.

7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A 7F 332 D6 CA E7 38

AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A

73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

interest per annum.

Earning Per share

Dividend per share

implication of Financial Leverages.

I] Entirely through ordinary shares .

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9F E2 2E 7C 15

7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A 7F 332 D6 CA E7 38

73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

Profit After Tax

securities are at cost.

Amount payable on share

No. of units (Rs. 10 Each )

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F E2 C2E 7C 15 EA

II] The Cost of Capital is 10 %

III] PVIF factor at 10%.

AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A2 A9 FE

I] profit is calculated after deducting straight line depreciation and tax

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F E2 C2E 7C 15 EA

AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D 6C AE 73 823 A

73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

Use M.M. Model

Face Value = Rs 1000

II] Dividend is declared?

project are [a] indivisible

Yield To Maturity = 12%

Years to Maturity = 5 years

I] Dividend is not declared?

Current Market Price = Rs 1036

Coupon Rate (payable Annually) =13 %

7F 332 D6 CA E7 382 3A 2A 9F E2C 2E 7C 15E A 7F 332 D6 CA E7 38

E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D

73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

II] Ageing schedule.

IV] EBIT–EPS Analysis.

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9F E2 2E 7C 15

9F E2 2E 7C 15 EA 67F 33 2D CA E7 38 23A 2A 9F E2 C2E 7C 15 EA

III] Modigliani- Miller Approach

Q5C] Write a short note [Any 3 ]

6C AE 73 823 A2 A9 FE C2 E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9

E7 C1 5EA 67 F3 32D 6C AE 73 823 A2 A9 FE 2C E7 C1 5E 67 F3 32D

B] Explain the Relevance of capital rationing in capital budgeting of a firm .

73 823 A2 A9 FE 2C2 2E7 C1 5EA A67 F3 32D 6C AE 73 823 A2

2A 9F E2C 2E 7C 15 A 67F 33 D6 CA E7 38 23A 2A 9

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