Corporate Finance December 2023

Description

Assignment Sample Solution: Corporate Finance December 2023

NMIM$ Global Access

School for Continuing Education (NGA-SCE)

Course: Corporate Finance December 2023

Internal Assignment Applicable for December 2023 Examination

1) Calculate the WACC for M/s Antara Limited with the following information:
(10 marks)

Debentures 15,00,000
Bank Loan 2,00,000
Share price of M/s Antara Limited at the beginning of the year was Rs. 50 and end of theyear was Rs. 55 per share. Dividend declared was Rs. 5. Beta of the Company was pegged at 0.6. M/s Antara had floated its Debentures at 8% fixed interest for 5 years. The bank had extended a loan on floating rate basis. Interest paid during the year was Rs. 10000. Government securities are earning a return of 4% currently.

2) Calculate the Gross and the Net Operating Cycle for Vishal & Co. Ltd. using thefollowing information. (Assume 360 days in a year). (10 marks)
Amt. in Rs.
Opening Balances
Raw Material 200,000
WIP 60,000
Finished Goods 600,000
Debtors 250,000
Creditors 550,000
Closing Balances
Raw Material 300,000
WIP 65,000
Finished Goods 725,000
Debtors 215,000
Creditors 575,000
Annual Purchase of Raw Material 3,200,000
Manufacturing Expenses 550,000
Selling & Distribution Costs 300,000
Sales 4,480,000

3)
a) What should be the amount to be invested:
i) To receive Rs. 2,00,000 per annum in perpetuity at an interest rate of 8%.
ii) In addition to conditions of point (i) above, if a growth rate of 3% is expected every year.
To receive Rs. 4,00,000 per annum in perpetuity at an interest rate of 5%.
(5 marks)
b) Calculate the current ratio and Acid Test Ratio with the following information
(5 marks)
Debtors 500,000
Cash and Bank 200,000
Inventory 400,000
Trade Payables 150,000
Bank OD 50,000
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