QThis question paper contains 7 printed pages.] Your Roll No, Sr. No. of Question Paper : 8350 Unique Paper Code : 61017902 Name of the Paper : Corporate Analysis & Vatuation ‘Name of the Course : Bachelor of Busine: Administration, 2017 (FIA) (CBCS) Semester ca Duration : 3 Hours Maximum Marks mi ri for tes, 1. Write your Roll No. on the top immediately on receipt of this question paper. 2, Answer all questions. 3. All questions carry equal marks. 1. The table given below shows some accounting ratios for a few selected industries from India for the year 2012- 13. P.T.O.| 8350 2 ae 5 ©)8350 3 (All figures, excepting the shares outstanding are in Rs, crore) TE Debt [intrest Wat] ROA [ROE to Assets | Coverage Men |00 [00 2010 oi | 2012 2013 Manatscring [034 [350 [739 ‘Automobiles [016 [11.35 — lose} ot tee Net Sales 2a940___ [39596 [33935 __ | 38199 cust cose foe [as — fs — toss fee pee te EBITDA To1as [12658 i954 [11353 Commer [039 [233__[183 Thos [2a a0 “982 EBIT. 9063, 11512 17782_" {9713 FMCG 0.10 23.52 097 Tao 12.48 [2765 [34.38 ae aie a ane a Healteare [0.18 [7.70 [137 Tosa [13.74 [1306-138 1 0.05 [362 [2.18 [0.86 230 [28.09 [28.17 ocean 82 (DI? aes, (MATS [etek ‘Metal 028 [671 [12 [oat [1697 [12.59 [13.67 Dep. o1ads fea, gsr ut fia [ass T1578 56 ‘Net Fixed Assets_[ 16006 Trai? [27434 __ [33597 Power . x 0 034 13.64 [10.70 j fed xe —[026 [a7 [201 —tons — Hate fesse ar ae gee eta te [Inventory 3077 3953 | 4858 5257 : i ‘Accounts 434 424 904 796 (a) Compare the financial performance of manufacturing | _| receivables companies with the Pc i ‘Cash & 3234 4138 3946 2218 ‘ower companies. 2 : ae (b) Identify all the Industries with asset turnover ratio less ‘Other Current] 6678 W052] 8773), | 9587 than 1. WI ks Assets ay teeuinal deey. Talk aailleate? "Foul Curent | 13425 | 25509 | 18483 | 17860 | [Assets (c) Compare the financial performance of FMCG companies Investment 44979 46564 | 50282_| 50418 with the healthcare companies. (5x3=15) eer e099) pee Nase eee | [Provisions 3303 qa [3917 [3657 i 3 16458 19875 20755 2. The table given below provides some financial data for (eet mm Tata Steel Limited for the 4-year period 2009-10 to 2012- Total Debt. 25239 26148 | 23693 | 25911__ 13. No of Shares ‘ 971,215,229 45 Analysts have projected an 8% growth rate for Tata steel for the conling 5-year period 2013-14 to 2018-19 P.T.O8350 Cx 4 Assume that both capex and the working capital will also grow at 8% in the same period. The cost of capital of Tata steel is 15.15%. The cost of equity of Tata steel is 22%, Assume a terminal growth rate of 10% after 2013. Value the shares of Tata steel using the free cash flow method. (is) 3. The table given below provides the financial highlights for Microsoft Corporation, September 12, 2012. Price 330.63 ‘Common shares 838 Outstanding (billion) Market Capitalization | $258 (8 billion) Latest 12 Months Sales (Sbillio; 37.72 EBITDA(Sbillion) $30.71 Net Income (§ billion) | $16.98 EPS $2.00 Valuation Microsoft _| Industry Avg Price/Eamings 15.4 175 Price/Book 39) 105 Price/Sales 35 Price/eash flow 109 205 PEG Ad 12 Profitability ROE 275 249 ROA 15.0 Operating profit margin | 37.9 Net profit margin 23.0 23.2 1350 5 weightage. at a lower level. Base year (year 0) information + Revenues + EBIT + CAPEX + Depreciation + Net working capital as percentage of revenues + Corporate tax rate (for all time) + Paid up equity capital (10 par) + Market value of Debt Compute the value of Microsoft. With the help of the Relative Valuation Approach. The Valuer feels that 50% weightage should be’ given to Earnings in the valuation process. Book value and cash flows may be given equals (is) ‘Magnavision Corporation is expected to grow at a higher of 4 years, thereafter the growth rate will be fall and stabilize : 3000 million +: $00 million 350 million :250million 25% 230% : 400 million : 1200 million P.T.O.6 tee . Input for the High Growth Phase Length of high growth phase : 4years Growth rate in revenues, depreciation, EBIT and capex + 20% Net working capital as percentage of revenues + 25% Cost of debt (Pre-tax) 213s Debt-equity ratio Hl Risk-free rate 11% Market risk premium 17% Equity beta 21,129 Input for the Stable Growth Period Expected growth rate in revenues and EBIT . 10% Capital expenditure are offset eee by depreciation Net working capital as percentage of revenues 125% z of Debt (pre-tax) 1 12.14% 5 10% Market risk premium 1 6% 1.0 7 Debt-equity ratio 2 23 (). What is the WACC for the high growth phase and the stable growth phase? Gi) What is the value of the Firm? (5+10=15) Write a short on the following : (@ Levered and Unlevered Beta Gi) Bermuda Triangle of Valuation _ (ii) Forecasting Method which are used to forecast free cash flows (93415) ‘* (200)