50% Off

Strategic Financial Management NMIMS assignment June 2024


Strategic Financial Management NMIMS assignment June 2024



NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Strategic Financial Management
Internal Assignment Applicable for June 2024 Examination
Assignment Marks: 30
 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
Question 1
A company is evaluating two investment projects, Project A and Project B, each with different levels of risk and an initial investment of Rs. 3,00,000. The risk-free rate of return is 5%. The expected cash flows and their probabilities for each project are as follows:

Project A: Expected Cash Flow in Year 1: Rs.100,000 Expected Cash Flow in Year 2: Rs.150,000 Expected Cash Flow in Year 3: Rs.200,000
Project B: Expected Cash Flow in Year 1: Rs.80,000 Expected Cash Flow in Year 2: Rs.120,000 Expected Cash Flow in Year 3: Rs.180,000
The company’s financial analysts have determined that Project A has a beta of 1.2, while Project B has a beta of 0.8. The market risk premium is 8%.
Calculate the risk-adjusted discount rate for each project using the Capital Asset Pricing Model (CAPM) and then determine which project the company should choose based on the risk-adjusted Net Present Value (NPV) criteria. (10 Marks)
Question 2 There are several ways in which Mergers and Acquisitions can be categorized. Explain the different types of Mergers and Acquisitions (M&A) that companies can pursue to achieve strategic objectives and growth. Provide examples of each type and discuss the reasons behind their adoption. (10 Marks)
Question 3a
A stock option is for 100 shares of the underlying stock. Ayush, a trader buys one call option contract on stock of Alpha Ltd. with a strike price of Rs.25. He pays Rs.150 for the option. Assuming on the option’s expiration date, Alpha Ltd.’s shares are selling for Rs.35; compute the gain/loss incurred by Ayush. (5 Marks)
Question 3b
Xenon Ltd., is a multinational manufacturing company, and its management team is evaluating the financial performance of its various divisions. They want to assess each
division’s contribution to shareholder value using Economic Value Added (EVA). The company’s cost of capital is 10%.
Division A Division B Total Capital Employed Rs.20,000,000 Rs.15,000,000 Operating Profit Rs.3,500,000 Rs.2,800,000 Tax Rate 30% 25%
Calculate the Economic Value Added (EVA) for each division and determine which division is creating more value for the shareholders. (5 Marks).


Additional information

Solution Type

Normal, Customize


There are no reviews yet.

Be the first to review “Strategic Financial Management NMIMS assignment June 2024”