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Corporate Finance
December 2022
Examination
1. Refer the published
Balance Sheet of any listed Company. Identify its sources of funds.
Explain any 4 in
brief. (Balance Sheet need not to be copied or pasted in the answer) Compare
and rank the sources identified with respect to their cost to the company
(high, low). Discuss your observation
(10 Marks)
Ans 1.
Introduction
Bharti
Airtel is one of the leading firms in the telecom industry, and it has been
running its operations in the country since 1995. Bharti airtel is also known
as airtel and is a multi-national company running its operations in 18
different nations, including South Africa and south Asia.
Bharti
airtel was noted on the Indian stock exchange in 2002, and its shares were
detailed at a 40 percent cost. Investors earned a great deal of cash back after
that.
A
firm requires raising funds at minimum interest rates to include revenues in
its pockets. Raising money at more excellent rates of
Q2. M/s Priya
Industries Ltd. is evaluating 2 options of investments. Each one has the
following mentioned Cash Flows. Rate of Interest 5%
Evaluate the projects
using: i) Pay-back period
ii) NPV
iii) IRR
(Show the calculations for each method.)
Which option you as
the Chief Finance Officer of the Company would you select? Give reasons (10 Marks
|
Year |
A |
B |
|
0 |
-40000 |
-50000 |
|
1 |
5000 |
8500 |
|
2 |
12000 |
15000 |
|
3 |
10000 |
12000 |
|
4 |
12500 |
12300 |
|
5 |
10500 |
10500 |
Ans 2.
Introduction
Investment
is a procedure of comprehensive research and a creative eye. Huge organizations
invest their profits further in equities or by getting other companies. This
helps them earn compounded revenues, permitting them to create additional
income via various other sources. Selecting the basis for investment is a
challenging task. Many choices have to be evaluated, and the business has to
select the best out of them all.
There
are various methods to pick the most
3a. Sunil is valuating
2 investment proposals:
i) Invest Rs. 3 lacs for 5 years earn an
interest of 8% compounded quarterly.
ii) Investment of Rs.
20,000 per year for 5 years @ 10% compounded quarterly.
Which option should he
go for and why? (5 Marks)
Ans 3a.
Introduction
Investing
is when a certain amount of cash or money is bought for some kind of asset to
gain added profits on the money invested in the long run. When a person
purchases an investment, he buys it to develop riches for him. Investing a
certain amount of money every month or year in a hedge fund, real estate, or
mutual fund can give huge returns in the future. Investing is the most
convenient way to become rich if an individual middle-class desires to be rich
and well-off.
Concepts and
applications
Q3b. Sanjana has a
debenture of Par-value Rs. 100/- @ 6%. Calculate its current yield if:
(5 Marks)
i) Market Price is Rs. 98.20 ii) Market Price is
Rs. 102.00
What inference can you
draw from this about the relation between Market price and yield?
An 3b.
Introduction
A
debenture is likewise an asset or a kind of bond additionally. It is a
financial obligation instrument that is collaterally unsafe. Debentures are
issued on the backing of the reputation and goodwill of the provider. It is one
of the ongoing financial obligations an individual can use for funding
functions.
Concepts and
applications
1. Current market price=
98.20
par value = 100
Interest rate =
6%
Current yield= annual
interest payment/deb current price
= 106/98.20
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students, get fully solved assignments by professionals
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