NMIMS Corporate Finance Solved Assignment December 2023

Description

NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Corporate Finance
Internal Assignment Applicable for December 2023 Examination
Assignment Marks: 30
Instructions:
 All Questions carry equal marks.
 All Questions are compulsory
 All answers to be explained in not more than 1000 words for question 1 and 2 and for question 3 in not more than 500 words for each subsection. Use relevant examples, illustrations as far as possible.
 All answers to be written individually. Discussion and group work is not advisable.
 Students are free to refer to any books/reference material/website/internet for attempting their assignments, but are not allowed to copy the matter as it is from the source of reference.
 Students should write the assignment in their own words. Copying of assignments from other students is not allowed
 Students should follow the following parameter for answering the assignment questions
1) Calculate the WACC for M/s Antara Limited with the following information:
(10 marks)
Capital Structure
BV
Share Capital
50,00,000
Retained Earnings
2,50,000
l Assignment Applicable for December 2023 Examination
Debentures
15,00,000
Bank Loan
2,00,000
Share price of M/s Antara Limited at the beginning of the year was Rs. 50 and end of the year was Rs. 55 per share. Dividend declared was Rs. 5. Beta of the Company was pegged at 0.6. M/s Antara had floated its Debentures at 8% fixed interest for 5 years. The bank had extended a loan on floating rate basis. Interest paid during the year was Rs. 10000. Government securities are earning a return of 4% currently.
2) Calculate the Gross and the Net Operating Cycle for Vishal & Co. Ltd. using the following information. (Assume 360 days in a year). (10 marks)
Amt. in Rs.
Opening Balances
Raw Material
200,000
WIP
60,000
Finished Goods
600,000
Debtors
250,000
Creditors
550,000
Closing Balances
Raw Material
300,000
WIP
65,000
Finished Goods
725,000
Debtors
215,000
Creditors
575,000

Annual Purchase of Raw Material
3,200,000
Manufacturing Expenses
550,000
Selling & Distribution Costs
300,000
Sales
4,480,000

3)
a) What should be the amount to be invested:
i) To receive Rs. 2,00,000 per annum in perpetuity at an interest rate of 8%.
ii) In addition to conditions of point (i) above, if a growth rate of 3% is expected every year.
To receive Rs. 4,00,000 per annum in perpetuity at an interest rate of 5%.
(5 marks)
b) Calculate the current ratio and Acid Test Ratio with the following information
(5 marks)
Debtors
500,000
Cash and Bank
200,000
Inventory
400,000
Trade Payables
150,000
Bank OD
50,000
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