30669 VT VE A586 SI.No. Total No. of Pages :7 V Semester B.B.A. Examination, March/April - 2022 (Scheme : BBA - 2017) FINANCIAL MANAGEMENT-I (Elective-I) Time : 3 Hours _ Max. Marks : 70 PART - A gani- Answer any two questions. 20 marks cach. Omadoe ava gz 9 WIA. Zoo 20 Goes. QJ) Whatis financial management? Explain the scope of Financial Management. Brown ASPB Nossemd? Brows Adesso oecodz, AGA 22 2 Amrutha Co., ltd. is intending to install a new machine at a cost of €15,00,000 with a life of 5 years and an estimated salvage value €1,00,000. The company is in the Tax bracket of 25%. The estimated income from the investment before depreciation & taxes are as follows. Years ol 02 03 4 05 Income (Rs) 6,00,000 6,00,000 7.50.000 5,00,000 — 5,00.000 Compute a) Pay back period b) NPV at 12% discount rate ¢) Profitability index at 12% capitalisation rate (PV factors of & 1 at 12% PA for 1 to 5 years are, 0.892, 0.797, 0.711, 0.635, 0,567) PTO. https://www.uomonline.com30669 MA-586 os oWD Hobswss; TF 15,00,000 wom Bex chosna, evsaxes O3s coded ABQ, BBO obogs eibob 5 Nxrrigom mb B¥osnesoo BOF SAZOHQS. z 1.00, 000 nom eomevxeehd. somaoto Be. 25 5 Sori xise sos) Tori wows cesar, si. Betowos sommasee nc. Bar 01 02 03 04 05 emad (G2.) 6,00,000 6,00,000 7,50,000 5,00,000 5,00,000 sheds Qddnvod: 2) bse MSs eaO rca 2) Se. 12d wommngerdro GIA Ths dgy Be, a A) Be. 126 womosecssro HON ecogwody Acew,ct B mar’ Be. 1209 Ge. 1d THE BPe, 1 O05 5 aaienievi gabon. 0.892, 0.797 0.711, 0.635, 0.567. g ee 9B. 3) A.M. company has supplied the following information to calculate weighted average cost of capital Liabilities z Assets z Current liabilities 4,50,000 Sundry Assets —_ 19,50,000 Debenture 4,50,000 Preference Shares 2,25,000 Equity Shares 6.00,000 Retained Earnings 2,25,000 19.50,000 19,50,000 https://www.uomonline.com30669 MA-586 a) 20 Years, 8% debentures of % 2.500 face value, redeemable at 5% premium, sold at par, 2% floatation costs b) 10% Preference shares: sale price 100 per share, 2% floatation costs. ¢) Equity shares: sale price {115 Per share. floatation cost & 5 per share. The Expected dividend at the end of the current- financial years is = 11 per share which is expected to grow at the rate of 5% per year. The corporate tax rate is 30% AN. FoMHobo ss FAT Bro&sSobay, ACW Bos Aww womsne 2, FOmMs& Borsoo BaeOd. orrmosrse z ear zg BS Beriwosne —4,50,000 avg Gare — 19,50,000 MOT 4,50,000 Bes BES secre 2,25,000 matress, Kecorive 6,00,000 Tieden wed 2,25,000 19,50,000 ) 2) Bross GS TS Kedri F100, Be. 2 Fa) SBS seo TUS ws 2 oor 8 BHO kedohOs ) 2OCks eee -3- https://www.uomonline.com30669 MA-586 Q4) Sumukha Co., Ltd. needs € 50,00,000 to install a new machinery which will earn EBIT % 7.50,000 PA. The Co., has to choose a plan among Three alternative financing plans. Plan“A’: All Equity Share, Plan *B’ : 50% Equity shares and 50% of Debenture Plan‘) 5% Equity Shares and 75% of Debenture Under the plan “A” shares can be sold at $100 per share, under the Plan “B” the Equity shares are issued at 100 each and interest rate on Debenture is 15%, under the Plan “C” The Equity shares are issued at = 100 each and the interest rate on Debenture is 14% Determine the EPS for each Plan, assuming a tax rate of 30% which is the best plan? MBHD FORA doHmMSy word Bex obos say, FR WROD % 50,00,000 Bars, & 7.50,000 9G sds, Bor Boowd emsobsay, (EBIT) Batugms. towaos Tet Broward oeewdobO awodm, soh Bwadewnngs. eens fa’ : aepR TART, Seooried news ‘2’ : Se. 50 momen, Sete as 50 moog Av Omens ‘a’ : Se, 25 mabten, Seconw sbsy de. 75 moosgyiwo OSes ‘Oo’ obQ serve, Yoo F100 nen Sev SOBs. Oecd "2" obg, Bonen, soe F100 g oooees Bwaewr3ys wey, ROTENIRD, Se. 15 dos Nas Bowehd. aces ‘2” obg Seconvm, Fes F 1008 ae mow oseheb? https://www.uomonline.com30669 MA-586 PART-B Answer any two questions. 10 marks each, BwAmain 2 DINet wg_Oor. see 10 wosrivd. y of a company? Q5) What are the factors determing the dividend polit wom BoMACH coyDos mHs Hesodm, AFFOMS GCOBNMDZ)? Q6) M.G.Ltd., the following information is available in respect of the rate of return on investment (r), the capitalisation rate (ke) and earnings per share (E) 1 =12%, Ke=10%, E= % 20 Determine the value of its shares according to Gordan model assuming the followi Dividend payout ratio Retention ratio (1-b) (b) a) 10 90 b) 20 80 ¢) 30 70 d) 40 60 e) 50 50 20.8. OA AonoHad BoBted sheds BIGod Bo (1), womsovesra BO (ke) Bera DE Keos sheOs rvs (E) H setowosmgd. r=12%, Ke=10%, = 20 Be évtow © DENER HowoHr~cos narsradss BwGooh Moos ReOn BDRowad, som &BHd. ei 3 mens ews Bo8RhG do (Dip 33) (-b) (b) 2) 10 90 2) 20 80 a) 30 70 a) 40 60 a) 50 50 https://www.uomonline.comQ7) Suyog Ltd., Produced and Sold 2,00,000 units. Selling price X 50 per unit. variable cost % 32.5 Per unit and fixed cost % 10,00,000 P.a. The Co., capital structure consists 1,00,000 Equity shares of % 100/-, € 1,00,00,000, 8% Debenture @ 80,00,000 and 10% Preference shares of 100 each & 32,50,000 Assume the tax rate is 35% calculate. a) Operating Leverage b) Financial leverage ¢) Combined leverage modecn’ Ddoeiw* 2,00,000 Obed, wwsOrA sem Demgs. BS oneaw moose Bd F50 ndenrbs sxg BE oneawsri F 25 she, 40 Seg TF 10,00,000 Pawnadsd. tomdoh wowaevs dugoso % 100 ahosdessiesd 1,00,000 maaine; Hecorie F 1,00,00,000 ge. § moxisny % 80.00,000 sozz se 100 ma,3 Redon F100 BnNedor & 32,50,000nGa, wed Forioh BS Be. 35% Dot eb. Bs SYIOBANGmD, Tom ABno. a) momrsy 28 zi DQ) weowx xe, A) Footing xa, Q8) a) The EBIT of a firm is-Rs. 10,00,000. It has issued Equity share capital with ke at 10% and 8% Debt of Rs. 10,00.000. Find out the value of the form and over all cost of capital as per NI Approach. b) The EBIT of the firm is Rs. 6.00,000, over all cost of capital is 10%, its total capital fund is Rs. 20,00,000 of which 30% is debt with 8% interest rate. Compute the cost of Equity as pa NOI Approach? 2) womb somaab EBIT Rs. 10,00,000 toxdexx meee, Be nowmnvaied, Dewey, m, BOD wowmovcsdee Gd Be 10 abe Be. 80 ABO Boy de. 10,00,000 FomAo wey BPe, BR, Dos. wR nowaateddresas, NI Zjsc sombtosBouo. ~ b ae ao 2) wor sompob EBIT Rs 6,00,000 nt womanvesdre seg de. 10 wie woweey Degy oe. 20,00,000 BHA wey wodany degdq, mows se. 30 Tay, wADd Be. 8 NOI TGS B Ke oa, Bomar’ ~6- https://www.uomonline.com30669 MA-586 PART -C Answer any two questions. $ marks each. anamdce 2 wanen soar, See 5 Goss. Q9) Write anote on Time Value of Money BOG Nos Bed wri wars wooo. Q10) State the essential feature of capital structure. nowsDy Swdoh eHysaVd ogrorvm, SPA. Q11) Find out the value of share under Walter’s model k = 12% r = 15% EPS=Rs. 15 and dividend payout ratio is 25% K = &¢.12 r= e.15 EPS=Rs, 15 3032 oogeos MHS Dds) Be. 25 Om, amRM meee AwAsobg seo cota, sordéotewo. Q12) State the factors influencting the capital Budgeting. nomad Gobdons shed Momrs aeads eounwm, BVA. https://www.uomonline.com Whatsapp @ 9300930012 Send your old paper & get 10/- wat Grr toe ast sit 10 wea Te, Paytm or Google Pay & -7- https://www.uomonline.com