Anirudh Ltd., issues right shares which increases the market value of the shares of the company by Rs.150crore. The aggregate market value of all the shares included in the index before the right issue made isRs.2,500 crore. If, the Base year average for calculating the index number for a period starting from the timethe right issue is made till the next base year change becomes necessary is Rs.1,010 crore, what is theexisting base year average?(a) Rs.1,070.60 crore(b) Rs.1,005.94 crore(c) Rs. 952.83 crore(d) Rs. 949.40 crore(e) Rs. 823.23 crore.
Which of the following is
, if entry barriers are low and exit barriers are high in the industry?(a) Returns are low and stable(b) Returns are high and stable(c) Returns are low and risky(d) Returns are high and risky(e) Returns may vary depending on industry selected.
Change in which of the following accounting policies will
affect the profit figures reported between twotime periods?(a) Treatment of R & D expenditure(b) Treatment of gratuity liability(c) Valuation of Inventories(d) Treatment of depreciation provisions(e) Revaluation of financial investment for treasury operations.
A convertible bond with a face value of Rs.1,000 had been issued at Rs.1,300 with a coupon rate of 14%.The conversion rate is 20 shares per bond. The current market price of the bond is Rs.1,650 and that of stock is Rs.66. The premium over conversion value is(a) 8.33%(b) 20.00%(c) 25.00%(d) 30.00%(e) 41.67%.
Which of the following statements is/are
regarding the Price/Sales (P/S) ratio?I. P/S ratio is useful for valuing companies even with no dividends at all.II. P/S ratio can be positive or negative.III. Firms with low profit margins and high P/S ratio are undervalued.IV. P/S ratio is not influenced by accounting methods.(a) Only (I) above(b) Only (II) above(c) Both (I) and (III) above(d) Both (II) and (III) above(e) (II), (III) and (IV) above.
Which of the following statements is
with respect to the two-stage dividend discount model?(a) It is difficult to specify the supernormal growth period with precision(b) The model suffers with the limitation of the change of high supernormal growth to a lower stablegrowth rate at the end of the supernormal growth period(c) The terminal price calculated in this model is derived from Gordon model(d) This model is best suited to those firms which have a high growth rate in the beginning and a gradualdecline in the growth rate over a period of time(e) This model assumes high-growth period and stable-growth period for valuing a stock.