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Sybms Finance Corporate Finance Atkt Paper

The document outlines the structure and content of the ATKT External Examination for the SYBMS Finance course at IMCOST, scheduled for March 2024. It includes various sections with compulsory questions covering topics such as corporate finance concepts, calculations related to cost of capital, and financial decision-making. Additionally, it provides instructions for answering questions and specifies the marks allocation for each section.

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42 views3 pages

Sybms Finance Corporate Finance Atkt Paper

The document outlines the structure and content of the ATKT External Examination for the SYBMS Finance course at IMCOST, scheduled for March 2024. It includes various sections with compulsory questions covering topics such as corporate finance concepts, calculations related to cost of capital, and financial decision-making. Additionally, it provides instructions for answering questions and specifies the marks allocation for each section.

Uploaded by

richakotak1712
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ASM’s Institute of Management & Computer Studies (IMCOST), Thane Degree

College
ATKT External Examination – March 2024
Course: SYBMS: FINANCE, Semester-III Duration: 2.5
Hr
Date: 28/03/2024 Total Marks: 75
Subject: CORPORATE FINANCE
Instructions: All questions are compulsory.
Q1) Attempt A and B
A. Fill in the blanks (8 Marks)
1) Corporate Finance is __________
(Objective Oriented / Future Oriented /Past Oriented /Present Oriented)
2) Cost of Capital represents____________
(Minimum rate of return/Maximum rate of return/Average rate of return/Normal rate
of return)
3) Cost of Equity capital denotes _____
( Ke / Kd / Kp Kc )
4) If firm interest rate is 10% and tax rate is 35%, what will be cost of debenture?
(3.5%, 7.8%, 6.5%, 7.6%)
5) Financial decisions are based on ________
(Cost of Capital /Capital /Fixed Assets / Current Assets)
6) Which of the following is correct?
( CL=OL*FL , CL=OL-FL , OL= OL*FL , OL = OL-FL)
7) The cost which equates the PV of cash inflow with the PV of cash outflow
is________
(Explicit cost / Historical cost / Future cost / Present cost)
8) Combined Leverage is calculated by _________
(O.L * F.L / C.L*F.L / F.L*E.L / E.L * O.L)

B. True or False: (7 Marks)


1) Cost of retained earnings is separately calculated.
2) Dividend on preference shares is adjusted for taxes to get their cost.
3) Cost of share is higher if it sells at a premium.
4) Debt is cheaper than equity.
5) Equity Capital is risk capital.
6) Rate of dividend on equity capital is fixed.
7) Preferences Shareholders have voting rights.
Q2) Attempt any one:
A) Branjoli limited requires funds amounting to Rs 50, 00,000 for its new project.
To raise the funds the company has following two options.
i) To issue equity shares of Rs 100 each at par amount to Rs 35, 00,000 and
borrow the balance amount at 12% p.a Debentures.
ii) To issue equity shares of Rs100 each at par and 12% Debentures in equal
proportion between Equity Shares & Debentures.
Noted: Income tax rate is 30%. (15 Marks)
Comments: Which option should be accepted by the company?
OR
A) The following details of Sumani Ltd. are as follows: (8 Marks)
Sales: Rs 8, 00,000
Contribution: Rs 4, 00,000
Fixed cost: Rs 2, 50,000
10% Debentures : 4, 00,000
Calculate: Operating leverage, financial leverage, combined leverage.

B) 1) Liddhi wants to invest @10% p.a compound interest as such amount will be Rs
80,000 at the end of 3 years. How much she should invest?

2) Baishnavi wants to invest Rs 55,000 @ 8% p.a for 5 years. Calculate Future


Value on the basis of Quarterly & Half Yearly (7Mark)

Q3) Attempt any one:


A) Sejal ltd has the following Cost of Capital: (15 Marks)

Particulars Amount
Equity Shares Capital Rs 5,00,000
10% Preference shares Rs 2,50,000
15% Debentures Rs 70,000
Retained Earning Rs 30,000
It was decided by the company to issue Rs 5 as dividend and growth rate is 5%
also market price is Rs 350. Tax @ 30%.
You are required to calculate Weighted Average cost of capital as per Book Value
& Market Value Method.
OR
A) Dharavani ltd furnishes you the following information where she has invested
amount of Rs 55,000. (8 Marks)

Year Cash Inflow


1 15,000
2 18,000
3 19,000
4 12,000
5 21,000
6 19,000
7 15,000
Present value @ 12.5% discount.
Calculate Net present value & Profitability Index

A) I) R.J. Ltd issued Rs 100 lakhs 12% Debentures of Rs 100 each redeemable at
par after 5 years. Tax rate is 10%. Calculate cost of debentures.
II)Bhravani Ltd received Dividend of Rs 5 ,Market Price is Rs 285 & Growth
rate is 9%. Calculate Cost of Equity.
(7 Marks)
Q4) Attempt any one:
A) Laxmi Chit Fund ltd is considering purchasing a machine. Machine A &B of
Rs 5, 00,000 each. Discount rate is 10% & 12% for 5 years (15 Marks)

Years Machine A: Machine B:


Cash Inflow Cash Inflow
1 165000 145000
2 215000 235000
3 195000 185500
4 158750 128750
5 110000 100000

Calculate: Net Present value, Profitability Index, Internal Rate of Return


OR
A) Following are the details available of Pushpa Ltd. (8 Marks)
Annual Sales: Rs 6, 00,000
Variable Cost: Rs 4, 00,000
Fixed Cost: Situation: I: 50,000
Situation: II: 80,000
Company has 10% debentures of Rs 1, 00,000.
Calculate the following in all Two Situations:
1) Operating Leverage
2) Financial Leverage
3) Combined Leverage

B) Find out the Future Value if Company deposit of Rs 12,000 for 3 years @ 9% on
the basis of ( 7 Mark)
i) Annually
ii) Quarterly
iii) Half yearly
iv) Monthly
Q.5) A) Define FDI? State the emerging trends in FDI in India? (8Marks)
B) Explain the RBI Guidelines for Public deposits? (7 Marks)
OR
Q5) Write Short Notes on: (Any 3) (15 Marks)
1) Features of corporate finance.
2) Importance of financial management.
3) Over capitalization
4) Commercial paper
5) Overdraft v/s cash credit

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