CONTACT: PRAKASH
Mob:
+919741410271
Corporate Finance
1.
State with reason whether the following transaction will result in an increase
or decrease of working capital or do not affect working capital.
·
A company issued debentures for Rs 50
lacs
·
Stock of Rs 50000 sold for Rs 75000
·
Brokerage paid Rs 125000
·
Long term Investment worth Rs 25000 sold
for Rs 20000
·
Building purchased for Rs 25 Lacs
2.
Calculate the value of share according to Gordon’s Model for Case P & Q and
Interpret the results when r>Ke, r= Ke
|
|
Case P
|
Case Q
|
|
Cost of capital
|
0.20
|
0.20
|
|
Internal rate of
return
|
0.30
|
0.20
|
|
Earnings per share
|
5
|
5
|
|
Retention ratio
|
40%
|
40%
|
3.
A) The following detail is available for Leo Limited. It produces a special
kind of cement which is sold in the bags of 20 kgs .The revenue and cost
patterns were as follows-
·
Selling price per bag Rs 50
·
Variable cost per bag Rs 30
·
Fixed cost Rs1.5 lac
·
Quantity 15000 bags
Calculate
the Break even quantity. Assuming a 10 % increase in the production volume,
calculate the percentage change in profit.
3.
B) Capital rationing is a strategy adopted by an organization so as to limit
the cost of its own investments. Apart from this, there are certain other
benefits of the same. As a financial manager of HDT Limited discuss the types
and benefits of capital rationing.
CONTACT: PRAKASH
Mob:
+919741410271
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