Subject: Financial Modeling Instructions: Answer all the questions. Marks allotted 100.

0. Each Question carries equal marks. Word limit is 500 words per questions. General Instructions: The Student should submit this assignment in the handwritten form (not in the typed format) The Student should submit this assignment within the time specified by the exam dept Each Question mentioned in this assignment should be answered within the word limit specified The student should only use the Rule sheet papers for answering the questions. The student should attach this assignment paper with the answered papers. Failure to comply with the above Five instructions would lead to rejection of assignment

Q1. Distinguish between Sensitivity Analysis and Simulation Analysis of any company of your choice. Q2. XYZ ltd. Intends to set up a project with a capital cost of Rs. 5, 00,000. The following alternatives are available. I = 100% Equity Financing II = Debt: Equity, 1:1 III = Debt: Equity, 3:1 The estimated annual net cash inflows are 24%, i.e., Rs. 1, 20,000 on the project. The rate of debt is 15% calculate the overall cost of capital for the above alternatives. Q.3 Consider the following data for a certain stock Price of stock now = So= Rs. 100 Exercise price = E= Rs. 86 Standard deviation of continuously compounded annual returns ==0.3 Year to maturity = t= 0.5 Interest rate per annum = 0.14 Apply the black-scholes formula and calculate the value of an Option.

Q4. Explain the Financial Model of Reliance Capital. 1