CORRECTIONS TO THE SOLUTIONS THAT WERE SENT EARLIER

Pg. 15 Q.No. 19

Expected DPS = ₹50 Will be taken as D1. (It was wrongly taken as Do).

Pg. 19 Q.No. 35

Part c. P4 = D5/ (Re-g)

=18.36(1.08)/(.14-.08)

=₹330.48

[It was wrongly done as 243/ (.14-.08)]

Pg. 20 Q.No. 39 – Leave the sum – data missing.

Pg. 20 Q.No.41 – It would be FCFE approach (not FCFF approach).

Pg. 22 Q.No 45 – leave the sum (out of syllabus).

Pg. 23 Q.No 46, 47, 48 – this would also be FCFE approach (not FCFF approach).

Pg. 33 Q.No.72. (iv). Alternate Solution

Total PAT = 2,02,50,000*.15+75,00,000 = 1,05,37,500

Total no. of shares = 5,80,000

EPS = PAT/No.of shares

= 1,05,37,500/5,80,000

= ₹18.1681

P/E Ratio = 8 times

So, share price = EPS * P/E Ratio

= 18.1681*8

= ₹145.34.

[Question no. 72 and 74 are same].

Pg.33 Q.N0 73

Po = ₹55

Rights ratio = 1:4

Theoretical post right price = N*Po + X/ (N+1)

52 = 4*55+X/ (4+1)
 Or, 52 = 220+X/ (5)

0r, 52*5 = 220+X

Or, 260 = 220+X

0r, X = 260-220

= ₹ 40.

Therefore subscription price for one share is ₹ 40.