Master of Commerce (M.Com.) Part I SEM II 2017 2018 May 2018 CORPORATE FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

• Please check whether you have got the right question paper
• 2. Figures to the right indicate full marks

1. Q3 Use of simple calculator is allowed
2. Q4 Working notes should form part of the answer
3. Q1 With the help of following information is supplied by M/S XYZ Ltd. Complete the following Balance Sheet given below : Reserves and Surplus ? | Current Assets Sundry Creditors ? Cash and Bank Balance ? Provision for Tax ? Following information is available : 15 marks
   • a) Gross profit ratio is 25% and which is
   • c) Rate of Income Tax is 50 %
   • d) Purchases and Sales are on credit basis
   • f) Creditors Turnover Ratio (Cost of Sales Creditors) = 12 times
   • j) Current
4. Q1 below are income statements of Three firms A, B and C. 15 marks
5. Q3 Combined Leverages of A, B and C Ltd
   • Q.P. Code : 13805
6. Q2 Ultra Ltd. has the following capital structure : The market of companies Equity share is It is expected that the company would next year pay a dividend of per share on the face value of The company’s Growth Prospects are 5%; P.a. assuming corporate taxation @ 35%. You are required 15 marks
7. Q1 weighted average cost of capital based on the existing capital structure
8. Q2 the new composite weighted average cost of capital if the company raises additional capital of Lakhs as under : This would result in increasing the expected Dividend to per Equity Share and Leave the Growth rate unchanged at 5 % and the anticipated market price of the Equity shares would fall to
9. Q2 Aditi Ltd. has Equity share capital of divided in to shares of each. It wishes to raise further = 1,00,000 for Expansion cum moderation scheme The company plans the following alternatives : 1). By issuing Equity shares only 15 marks
10. Q2 by issuing equity shares and through debentures or term loan By raising term loan only at 10% p.a
11. Q4 by issuing Equity shares and by issuing 8% Preference You are required to suggest the best alternative giving your comments assuming the estimated Before Interest and Taxes (EBIT) after expansion is and cooperate rate of tax is 35%
    • Q.P. Code : 13805
12. Q3 Venus and Paradise co. gives you the following information. Prepare Trading and Profit & Loss Account for the year ended 31“ March 2017 and Balance Sheet as on that date in as much as possible : Net Profit Ratio on Turnover Gross Profit Ratio on Turnover Depreciation on Fixed Assets @ 10% Credit period allowed by the suppliers On March, 2017 Current Assets consisted of Stock, Debtors and Cash only. There was no bank overdraft. All purchases were made on credit. Cash sales were 1/3 of credit 15 marks
    • a) Find out the compound value of an annuity of for 5 years at 5% (Invested at 8 the beginning of the year)
    • b) Following is the Capital Structure of a firm : 7 The firm’s after Tax component cost of various sources of finance are as follows: Calculate weighted average cost of the firm
    • Q.P. Code : 13805
13. Q4 a) State whether the following statements are true or false : 8 marks
14. Q1 on preference shares is fixed
15. Q4 Current ratio is also known as Acid Test Ratio
16. Q5 approach is essentially Net operating income approach
17. Q6 Trading on equity is used to increase EPS
18. Q7 is convertibility of investment in to cash
19. Q8 Leverages should be as low as possible
20. Q4 b) Match the following : e Life Insurance e Life blood of Business e Weighted average cost of Write Short (Any 3) : 15 7 marks
    • a) Functions of Financial Management
    • c) Types of Leverages
    • d) Forms of Investments
    • e) Classification of Cost of Capital

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