. Meg: ek Bs r a Mam, PAD. Sem IE fees snes Am ¢ QP. Code = 1: - (Time : 2 Hours} SS Please check whether you have got the right question paper. = NB: 1. Allqcsions a compulsory, ach queson hase interes option, 2. Figures to the right indicate full mares 3. Use ofsimpleeaeuatoris allowed, 4 Working ant snl am prt 1 7 following Balance Sheet given| a Liabilities Equity Shares Capital Reserves and Surplus 20% Debentures (Current Liabilities ‘Sundry Creditors Provision for Tax (Current Year) “Total 1s Be 2 10;30,000. 1,30,000 300,000, 250,000, 7 795000 2 2) Financial Leverages TURN OVER _MFA662ACSTFTDMEADSOESEO9SEDSTS2 : - 2 BB Tin Lakhs : Equity Share Spe 10% Preference Shares a0. é 10% Debentures ots Ss Total ao “The market of companies Equity sare is €70: Is expetted thatthe company would ext year pay a dividend of £8.40 per share on the face valie of 10. The company’s Growth Prospects are 5%; Pa, assuming corporate txation@ 35%. You are required 1) Compute weighted average cos of capital based onthe existing capital stuctixe 2) Compute the new composite weighted average cost of capital i the company raises additional capital of £60 Bakhs'as under < Particulars Sim Lakhs. ‘Equity Share = ¢ HS 12% Preference Shares Js 10s ‘9% Debentures od oo 20." ~~ Fatal oO ‘This would resi in increasing the expetted Dividend to €9.10 per Equity Share and Leave the Growth rate unchanged at 5-46 anid the anticipated market price of the Equity shares would fallto 275.0 Ss . SSS oe 2. Agi Lid. has Equity share capital of €3,00,000 divided into shares of €100 each. It 1S “wishes to raise further © 1,00,000 for Expansion tum moderation scheme. The company plans the folowing alternaves 2 <1) -Byfissiing Equity shares only." 2) €20,00 by sung ely share and €80,000 through debentures or tem Loan G@i0% pa Sf 3) © Bysaising term loan only at 10% pa. ~ 4). ©40,000 by iesuing: Equity shares and €60,000 by issuing 8% Preference shares, < : fess ‘You are required t0 suggest the best altermative giving your comments assuming the < °° timated "Barings Before Interest and Taxes (EBIT) after expansion is €50,000 and cooperate rate of tax is 35%. § § esse TURN OVER § : AAF3E62ACSTFTD3BEADS9ESBI93EDSTS3. Venus and Paradise co. gives you the following information, ‘8 Loss Account forthe year ended 31* March 2017 and. ‘as much as possible : ‘Opening Stock . Stock Tumover Ratio ‘Net Profit Ratio on Tumover ‘Gross Profit Ratio on Tumover Current Ratio Tong Term Loan, OT Wars, 17 Sas : vasno bank ove All pubis sales. ‘TURN OVER AAE662ACSTF7DSEEADSOESE393ED575