Master of Commerce (M.Com.) Part I SEM II 2016 2017 Nov 2017 CORPORATE FIN 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 The summarised final accounts of two companies are as Revenue statement for the year Less : Cost of Sales 1,98 000 You are required to calculate the following ratios and comment : 15 marks
   • a) Proprietary Ratio
   • d) Operating Ratio
   • e) Return on Capital Employed Ratio
   • f) Return on Proprietors Equity Ratio
   • g) Expenses Ratio 870961BE3051F1446071C8BA1E3A1DC2
   • Q.P. Code : 13806
4. Q1 The assets of SONA Ltd. consist of fixed assets and current assets, while its current liabilities comprise bank credit in the ratio of 2 : 1. You are required to prepare the Balance Sheet of the company as on March, 2017 with the help of following 15 marks
5. Q2 JKL Limited has the following book value Capital Structure as on 31“ March, 2017 : The equity share of the company sells for It is expected that the company will pay next year a dividend of 2 per equity share, which is expected to grow at 5% p.a 15 marks
6. Q1 . Compute weighted average cost of capital [WACC] of the company based on the existing capital structure Compute the new WACC if the company raises an additional lakhs debt by issuing 12% debentures. This would result in increasing the expected equity dividend to and leave the growth rate unchanged, but the price of equity share will fall to 16 per share
7. Q2 You are required to determine the weighted average cost of capital of a firm using 15 marks
   • (i) Book — value weights and Market value weights. The following information is available for your perusal Present Book value of the firm’s capital structure is : All these securities are traded in the capital markets. Recent price are : 870961BE3051F1446071C8BA1E3A1DC2
   • Q.P. Code : 13806 Anticipated external financing opportunities are as follows :
8. Q1 100 per debentures redeemable at par : 20 years maturity, 8% coupon rate,
   • ii) 100 preference shares redeemable at par : 15 years maturity, 10% dividend In addition the dividend expected on the equity shares at the end of the year is 2 per share, the anticipated growth rate in dividend is 5% and the firm has the practice of paying all its earnings in the form of dividend. The corporate tax rate is 50%
9. Q3 the following prepare Income statement of the company A and Company B : Variable Cost to Sales 66.66% No. of Equity Shares 1,00,000 70,000 Also calculate and comment on EPS of both the companies The details regarding three companies are given below : 8 Compute value of their equity shares using Walters model when dividend payout 870961BE3051F1446071C8BA1E3A1DC2 15 marks
   • Q.P. Code : 13806
10. Q3 b) following information is given for QB Ltd. Calculate the market Price per share using : 7 marks
11. Q4 (a) Multiple Choice Questions : 5 marks
    • (a) = Interest = Zero
12. Q2 The term capital structure denotes
    • (a) Total of liability side of Balance sheet
    • (b) funds, preference capital and long-term debt Types of capital issued by a company
13. Q3 Advantage of Debt financing is
    • (a) Interest is tax — deductible
    • (c) Does not dilute owner’s control All of the above
14. Q4 The appropriate objective of
    • (a) Maximisation of sales
    • (b) Maximisation of owner’s wealth
    • (c) Maximisation of own share capital
    • (d) of these
15. Q5 is the Effective Annual Percentage Rate (EAPR) of 12% compounded
    • Q.P. Code : 13806
16. Q4 (b) Match the columns : 5 marks
17. Q3 Dividend policy (stable) (c) Under investment
18. Q4 Combined Leverage (d) between the profits and the investments of the concern
19. Q5 Ratio (e) Constant percentage of Net
20. Q2 Financial Leverage is always beneficial to the firm
21. Q3 EPS maxinisation is the sole objective of financial management
22. Q4 Cash to the firms at different time periods are directly
23. Q5 always calculated with reference to book value of different sources
24. Q4 Write Short notes on (Any 3) : 15 marks
    • a) Importance of financial management for different stakeholders
    • b) Different types of ratios
    • c) Weighted average cost of capital
    • d) Different types of stable dividend policies
    • e) Distinguish between operating leverage and financial leverage 870961BE3051F1446071C8BA1E3A1DC2

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