Master of Commerce (M.Com.) Part I SEM II 2016 2017 May 2017 I CORPORATE FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 All questions are compulsors question hus an internal option, Figures to the right full marks Use of simple calculator is allowed 4+. Working notes should form part of the answer following Balance Sheet below Reserves and Surplus | Current Assets Sundry Creditors ? | Cash and Bank Balance i Provision for Tax Following information is :
   • 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 Ratio 2:
2. Q1 Given below are income Statements of Three firms A, B and 15 marks
3. Q3 Combined Leverages of A, B and C Ltd
   • Q.P. Code : 13805
4. Q2 Ltd. has the following capital structure £5 The market of compames 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 @ 35%. You are required
5. Q1 Compute weighted average cost of capital based on the existing capital structure,
6. Q2 Compute the new composite weighted cost of capital if the Company raises additional capital of Lakhs as under : Particulars in Lakhs 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 75, 2 Aditi Ltd. has Equity share capital of divided in to shares of each, It 15 wishes to raise further 1,00,000 for Expansion cum moderation scheme The company plans the following alternatives :
7. Q2 by issuing equity shares and 80,000 through debentures or term Joan
8. Q3 term Joan only at 10% p.a
9. Q4 by issuing Equity shares and by issuing 8% Preference You are required to suggest the best alternative giving your comments assuming the estimated 'Earnings Before Interest and Taxes (EBIT) after expansion 1s and cooperate rate of tax is 35%
10. Q3 Venus and Paradise co. gives vou the follow Ing mformation. Trading and Profit & Loss Account for the year ended March 2017 and Balance Sheet as on that date in as much as possible Net Profit Ratio on Turnover 15% Gross Profit Ratio on Turnover 20% Depreciation on Fixed Assets @ 10% 20.000 period allowed by the suppliers ! month On 31" March, 2017 Current Assets consisted of Stock. Debtors and Cash only, There Was no overdraft. All purchases were made on credit. Cash sales were of credit 15 marks
11. Q3 a) Find out the compound value of an annuity of for 5 years at (Invested at the beginning of the year), 8 marks
    • b) is the Capital Structure of a firm : 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
    • a) State whether the following statements are ;
12. Q1 Dividend on shares is fixed
13. Q3 funds includes ts also known as Acid Test
14. Q5 MM approach is essentially Net -ome
15. Q6 Trading on equity is used to increase EP
16. Q7 Liquidity is convertibility of investment if cash
17. Q8 Combined Leverages should be as low asgp sible
18. Q4 b) Match the following : e Rule of 72 perating blood of Business Net Operating Profit Ratio 4 onvertibility into Cash Government Securities isk of loss 4, Write Short notes on (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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