assignmentssolution@gmail.com

Get Assignments and Projects prepared by experts at a very nominal fee.

More than 8 years in assisting assignments and projects/dissertation/thesis of MBA,BBA,BCA,MCA,PhD and others-

Contact us at : Email : assignmentssolution@gmail.com

Help for : SMU, IIBM,IMT, NMIMS, NIBM ,KSBM, KAIZAN, ISBM, SYMBIOSIS, NIMS, IGNOU, XAVIER, XIBMS, ISM, PSBM, NSBM, NIRM, ISBM, ISMRC, ICMIND, UPES and many others.

Help in : Assignments, projects, M.Phil,Ph.D disseration & thesis,case studies

Courses,MBA,BBA,PhD,MPhil,EMBA,MIB,DMS,MMS,BMS,GDS etc

Contact us at : Email : assignmentssolution@gmail.com



Wednesday 4 July 2012

MCC 103 Spring Drive 2012 : contact us for answers at assignmentssolution@gmail.com

ASSIGNMENTS M.Com General – 1st Semester Subject Name: Corporate Financial Management Subject code: MCC 103 Spring Drive 2012 4 credits (60 marks) (BKID: B1469) Set 1 Answer the following questions. Each question carries 10 marks. 1. Why are finance functions always placed in the hands of top management? 2. Why is the NPV method important?
3. What are the two types of capital rationing? 4. What are the factors that affect long-term funds? 5. The following are the costs and values for the firms A and B according to the traditional approach: ____________________________________________________________________ A (Rs) B (Rs) ____________________________________________________________________ Total value of firm, V 50,000 60,000 Market value of debt, D 0 30,000 Market value of equity, E 50,000 30,000 Expected net operating income 5,000 5,000 Cost of debt, INT = kd D 0 1,800 Net income, NOI – kd D 5,000 3,200 Cost of equity, ke = ( – kd D)/E 10.00% 10.70% Debt-equity ratio, D/E 0 0.5 Average cost of capital, ko 10.00% 8.33% ____________________________________________________________________ Compute the equilibrium value for Firms A and B in accordance with the MM thesis. Assume that (i) taxes do not exist and (ii) the equilibrium value of ko is 9.09 per cent. 6. A firm finances all its investments by 40 per cent debt and 60 per cent equity. The estimated required rate of return on equity is 20 per cent after-taxes and that of the debt is 8 per cent after taxes. The firm is considering an investment proposal costing Rs.40,000 with an expected return that will last forever. What amount (in rupees) must the proposal yield per year so that the market price of the share does not change? Show calculations to prove your point.
ASSIGNMENTS M.Com General – 1st Semester Subject Name: Corporate Financial Management Subject code: MCC 103 Spring Drive 2012 4 credits (60 marks) (BKID: B1469) Set 2 Answer the following questions. Each question carries 10 marks. 1. AB Ltd needs Rs.10 lakh (one million) for expansion. The expansion is expected to yield an annual EBIT of Rs.160,000. In choosing a financial plan, AB Ltd has an objective of maximizing earnings per share. It is considering the possibility of issuing equity shares and raising debt of Rs.100,000, or Rs. 400,000 or Rs. 600,000. The current market price per share is Rs.25 and is expected to drop to Rs. 20 if the funds are borrowed in excess of Rs.500,000. Funds can be borrowed at the rates indicated below: (a) up to Rs.100,000 at 8%; (b) over Rs 100,000 up to Rs 500,000 at 12%; (c) over Rs 500,000 at 18%.Assume a tax rate of 50 per cent. Determine the EPS for the three financing alternatives. 2. How would you calculate the degree of financial leverage? 3. A pro forma cost sheet of a company provides the following data: _______________________________________________________________ Rs. _______________________________________________________________ Costs (per unit): Raw materials 52.0 Direct labour 19.5 Overheads 39.0 Total cost (per unit) 110.5 Profit 19.5 Selling price 130.0 _______________________________________________________________ The following is the additional information available: Average raw material in stock: one month; average materials in process: half a month. Credit allowed by suppliers: one month; credit allowed to debtors: two months. Time lag in payment of wages: one and a half weeks. Overheads: one month. One-fourth of sales are on cash basis. Cash balance is expected to be Rs1,20,000. You are required to prepare a statement showing the working capital needed to finance a level of activity of 70,000 units of output. You may assume that production is carried on evenly, throughout the year and wages and overheads accrue similarly. 4. Explain the merits and dangers of stability of dividends. 5. Discuss the causes of enhanced profitability. 6. Compare the pooling of interests method with the purchase method.

No comments:

Post a Comment