Dear students, get latest Solved assignments and case study help by professionals.
Mail us at : help.mbaassignments@gmail.com
Call us at : 08263069601
Corporate Finance
1. The capital structure of ABC Pvt. Ltd is as follows:
Equity share capital (each share of Rs. 10) = Rs. 10,00,000
Debentures with a coupon rate of 9.5% = Rs. 8,00,000
Reserves and surplus = Rs. 7, 00,000
Revenue from the business activities for the company is Rs. 1.50 crores. Its variable cost is 8% of the revenue, fixed operating cost is Rs. 48 lakhs and the company pays income tax at a rate of 25%.
a. Calculate financial leverage, operating leverage and combined leverage for the company.
b. Determine the likely level of EBIT for EPS of (i) Rs. 20, (ii) Rs. 30, and (iii) Rs. 45
Introduction
In the analysis of financial information, leverages depict the impact of one variable of income statement of an entity over the other. Leverage is a broad term can be associated with calculating impact for borrowing decisions or for other financial decisions. As far as financial leverage is concerned, the impact of interest payment charge on earnings of an entity can be seen whereas from operating leverage, the impact of directly attributable costs over revenue can be observed. When
2. The equity shares of a publicly traded company are priced at Rs. 450 with P/E (Price to Earnings) ratio of 15. The announces a dividend of Rs. 9 per shares. The shareholders of the company expect the dividend to grow at a rate of 6% every year, and the cost of equity for the company is 15%. According to the dividend relevance approach suggested by Walter and Gordon, what would be the impact of dividend announcement on the market price of the shares of the company if required rate of return for investors is (i) 12%, (ii) 15% and (iii) 18%. (10 Marks)
Introduction
Valuation of shares of a company can is an activity through true value of a company can be assessed. Several methods suggested by scholars by which valuation is done, each method has its own set of significant rules and assumptions and pros and cons. The value determined through different methods could be different. Out of those, there are these two valuation techniques, one of which is given by Professor James E. Walter, known as Walter’s Model, and the other one is developed
3. A manufacturing company forecast that it is likely to sell 6,00,000 units for the year 2021. The processing cost of an order is Rs. 150 and the carrying cost per unit of inventory is Rs. 12. The lead time of an order is 8 days.
a. What would be the economic order quantity (EOQ) and re-order point assuming 300 days in a year. (5 Marks)
Introduction
Economic Order Quantity and Re-order Point calculations are a part of inventory control management. Inventory controls regulate the inventory levels within the entity to minimize inventory holding and purchasing costs and maximize the benefit earned through it. The Chartered Institute of Management
b. The company implements business process reengineering which results in to reduction of 20% in cost of an order, 10% in carrying cost per unit of inventory and 25% in lead time of an order. What would be the new EOQ and re-order point. (5 Marks)
Introduction
Business Process Reengineering (BPR) is the process of implementing new business processes to make larger fundamental changes in the organization to attain business objectives and goals in a dynamic business environment.
Concept
Dear students, get latest Solved assignments and case study help by professionals.
Mail us at : help.mbaassignments@gmail.com
Call us at : 08263069601