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ICMAI Intermediate and Final Exam 8th Dec to 15th Dec 21

Participant ID 04182042414
Participant
LALIT KUMAR
Name
Test Center
Tikri Digital Zone
Name
Test Date 15/12/2021
Test Time 2:30 PM - 5:30 PM
Strategic Performance Management and Business
Subject
Valuation
Total Marks 52

Section : Section A MCQ

Q.1 SNT LTD. has announced issue of warrants on 1:1 basis for its equity shareholders.
The warrants are convertible at an exercise price of Rs. 18 per share. Warrants are
detachable and trading at Rs.10. What is the minimum price of the warrant if the
current price of the stock is Rs. 25?
Ans 1. Rs.5

2. Rs.7

3. Rs.15

4. Rs.4

Multiple Choice
Question Type :
Question
Question ID : 9583172309
Option 1 ID : 9583173785
Option 2 ID : 9583173786
Option 3 ID : 9583173787
Option 4 ID : 9583173784
Status : Answered
Chosen Option : 2
Marks : 1

Q.2 ___________ is the present value of expected future cash flows post merger that will
result from the combined operations and additional benefits expected to accrue.
Ans 1. Synergy Value

2. Value Gap

3. Purchase Price

4. Discount Cash Flow Value

Multiple Choice
Question Type :
Question
Question ID : 9583172297
Option 1 ID : 9583173737
Option 2 ID : 9583173738
Option 3 ID : 9583173739
Option 4 ID : 9583173736
Status : Answered
Chosen Option : 1
Marks : 1

Q.3 Which one out of the following is not a financial liability as per IND AS and new format
of Balance Sheet?
Ans 1. Financial Lease

2. Loans from banks

3. Debentures/Bonds Issued

4. Equity Shares

Multiple Choice
Question Type :
Question
Question ID : 9583172306
Option 1 ID : 9583173774
Option 2 ID : 9583173775
Option 3 ID : 9583173773
Option 4 ID : 9583173772
Status : Answered
Chosen Option : 1
Marks : 0

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Q.4 MRP-II refers to _____________

Ans 1. Manufacturing Resources Planning

2. Material Requisition Programme – II

3. Material Requirement Planning

4. Maximum Retail Price

Multiple Choice
Question Type :
Question
Question ID : 9583172303
Option 1 ID : 9583173761
Option 2 ID : 9583173763
Option 3 ID : 9583173760
Option 4 ID : 9583173762
Status : Answered
Chosen Option : 3
Marks : 0

Q.5 In Business Organizations, benchmarking means ___________

Ans 1. The simulation of cost reduction schemes that help to build commitment and
improvement of actions.
2. The search for industries best practices that lead to superior performance.

3. The analytical tool to identify high-cost activites based on the ‘Pareto Analysis’

4. The process of marketing and redesigning the way a typical company works.

Multiple Choice
Question Type :
Question
Question ID : 9583172296
Option 1 ID : 9583173734
Option 2 ID : 9583173733
Option 3 ID : 9583173732
Option 4 ID : 9583173735
Status : Answered
Chosen Option : 2
Marks : 1

Q.6 A firm has Rs.200 crores as capital employed and is earning 10% Return on Capital
Employed. If its weighted average cost of capital is 12%, then its Economic Value
Added (EVA) will be:
Ans 1. Rs. 4 Crores

2. (Rs. 3 Crores)

3. Rs. 3 Crores

4. (Rs. 4 Crores)

Multiple Choice
Question Type :
Question
Question ID : 9583172310
Option 1 ID : 9583173790
Option 2 ID : 9583173789
Option 3 ID : 9583173791
Option 4 ID : 9583173788
Status : Answered
Chosen Option : 4
Marks : 1

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Q.7 Balance sheet items are expressed as a percentage of __________ assets in common
size ratio.
Ans 1. fixed

2. total

3. nominal

4. current

Multiple Choice
Question Type :
Question
Question ID : 9583172300
Option 1 ID : 9583173749
Option 2 ID : 9583173748
Option 3 ID : 9583173751
Option 4 ID : 9583173750
Status : Answered
Chosen Option : 2
Marks : 1

Q.8 A supply chain is made up of a series of processes that involve an input, a _________
and an output.
Ans 1. Customer

2. Shipment

3. Supplier

4. Transformation

Multiple Choice
Question Type :
Question
Question ID : 9583172294
Option 1 ID : 9583173726
Option 2 ID : 9583173724
Option 3 ID : 9583173725
Option 4 ID : 9583173727
Status : Answered
Chosen Option : 4
Marks : 1

Q.9 ______________ is a statistical measure of fluctuations in a variable arranged in the

form of a series and using a base for making comparison.
Ans 1. index number

2. standard deviation

3. none of these

4. time series

Multiple Choice
Question Type :
Question
Question ID : 9583172301
Option 1 ID : 9583173754
Option 2 ID : 9583173752
Option 3 ID : 9583173755
Option 4 ID : 9583173753
Status : Answered
Chosen Option : 2
Marks : 0

Q.10 Financial Risks in Risk Management practices do not included _________.

Ans 1. Inflation Rate Risk

2. Exchange Risk

3. Interest Rate Risk

4. Trade Cycles

Multiple Choice
Question Type :
Question
Question ID : 9583172293
Option 1 ID : 9583173722
Option 2 ID : 9583173723
Option 3 ID : 9583173721
Option 4 ID : 9583173720
Status : Answered
Chosen Option : 2
Marks : 0

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Q.11 Which of the following is not a technique of Financial Statement Analysis?

Ans 1. Common-size financial analysis

2. Ratio analysis

3. Trend analysis

4. Time series analysis

Multiple Choice
Question Type :
Question
Question ID : 9583172304
Option 1 ID : 9583173766
Option 2 ID : 9583173767
Option 3 ID : 9583173764
Option 4 ID : 9583173765
Status : Answered
Chosen Option : 4
Marks : 1

Q.12 Financial analysis can be undertaken by ___________

Ans 1. All of these

2. creditors

3. None of these

4. management of the firm

Multiple Choice
Question Type :
Question
Question ID : 9583172298
Option 1 ID : 9583173742
Option 2 ID : 9583173741
Option 3 ID : 9583173743
Option 4 ID : 9583173740
Status : Answered
Chosen Option : 1
Marks : 1

Q.13 Which one of the following is not a perspective of Balanced Score Card?
Ans 1. Customer

2. Financial

3. Management and Employees

4. Learning and Growth

Multiple Choice
Question Type :
Question
Question ID : 9583172302
Option 1 ID : 9583173757
Option 2 ID : 9583173756
Option 3 ID : 9583173759
Option 4 ID : 9583173758
Status : Answered
Chosen Option : 3
Marks : 1

Q.14 A firm earns Economic profit when total profit exceeds

Ans 1. Normal Profit

2. Explicit Costs

3. Implicit Costs

4. Variable Costs

Multiple Choice
Question Type :
Question
Question ID : 9583172308
Option 1 ID : 9583173780
Option 2 ID : 9583173783
Option 3 ID : 9583173781
Option 4 ID : 9583173782
Status : Answered
Chosen Option : 1
Marks : 1

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Q.15 Which is not a, human capital related intangible asset?

Ans 1. Trained workforce

2. Union Contracts

3. Design Patent

4. Employment Agreements

Multiple Choice
Question Type :
Question
Question ID : 9583172295
Option 1 ID : 9583173728
Option 2 ID : 9583173730
Option 3 ID : 9583173731
Option 4 ID : 9583173729
Status : Answered
Chosen Option : 3
Marks : 1

Q.16 Which one of the following elements/parameters is not prescribed by the NCAER
Study on Corporate Distress Prediction for predicting the stages of corporate
sickness?
Ans 1. Long-Term Debt to Equity Ratio

2. Net worth position

3. Cash profit position

4. Net working capital position

Multiple Choice
Question Type :
Question
Question ID : 9583172305
Option 1 ID : 9583173770
Option 2 ID : 9583173771
Option 3 ID : 9583173768
Option 4 ID : 9583173769
Status : Answered
Chosen Option : 1
Marks : 1

Q.17 Income statement is a summary of a firm’s revenue and ________ over a specified
period.
Ans 1. net profit

2. expenses

3. fixed assets

4. current asset

Multiple Choice
Question Type :
Question
Question ID : 9583172299
Option 1 ID : 9583173747
Option 2 ID : 9583173746
Option 3 ID : 9583173744
Option 4 ID : 9583173745
Status : Answered
Chosen Option : 2
Marks : 1

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Q.18 The Current Assets and Current liabilities of RT LTD. are Rs.17000 and 12000
respectively. How much can the Company borrow on a short-term basis without
reducing the Current Ratio below 1.25?
Ans 1. Rs. 7000

2. Rs. 10000

3. Rs. 7500

4. Rs. 8000

Multiple Choice
Question Type :
Question
Question ID : 9583172311
Option 1 ID : 9583173795
Option 2 ID : 9583173792
Option 3 ID : 9583173794
Option 4 ID : 9583173793
Status : Answered
Chosen Option : 4
Marks : 1

Q.19 As per Altman’s Model (1968) if the value of Z-Score of a firm falls between 1.81 and
2.99 then the firm will be
Ans 1. Failed firm

2. Non-failed firm

3. None of these

4. Mixture of failed and non-failed elements

Multiple Choice
Question Type :
Question
Question ID : 9583172307
Option 1 ID : 9583173777
Option 2 ID : 9583173776
Option 3 ID : 9583173779
Option 4 ID : 9583173778
Status : Answered
Chosen Option : 4
Marks : 1

Q.20 The basic goal of a business firm is to ____________.

Ans 1. Maximize Profit

2. Maximize welfare of its Employees.

3. Maximize output

4. Maximize Revenues.

Multiple Choice
Question Type :
Question
Question ID : 9583172292
Option 1 ID : 9583173718
Option 2 ID : 9583173717
Option 3 ID : 9583173719
Option 4 ID : 9583173716
Status : Answered
Chosen Option : 1
Marks : 1

Section : Section B SAQ

Q.1 Fair Market Value is a premise of valuation. Is this statement true or false?
Case Sensitivity: No
Answer :
Possible Answer: NA
Given yes its true
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172316
Status : Answered
Marks : 1

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Q.2 __________ is a Comprehensive and integrated approach to addressing Corporate

Risk. Fill in the blank by using the appropriate word/s or phrase/s.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given Risk mapping
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172318
Status : Answered
Marks : 0

Q.3 Performance management creates a direct link between employee performance and
organizational goals. Is this statement true or false?
Case Sensitivity: No
Answer :
Possible Answer: NA
Given yes it is TRUE
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172326
Status : Answered
Marks : 1

Q.4 Under perfect competition, profit is maximized when two conditions are satisfied:
One, MR=MC and second, MC curve cuts MR from ___________.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given AC
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172312
Status : Answered
Marks : 0

Q.5 P Charts measures ____________ of defective in Statistical Process Control (SPC)

Methods.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given types
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172317
Status : Answered
Marks : 0

Q.6 __________ is a measure of value which tells whether a company is able to

generate returns that exceed its cost of capital employed.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given ECONOMIC VALUE ADDED (EVA)
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172315
Status : Answered
Marks : 1

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Q.7 If the risk free rate at present in the economy is 7.00%, the risk premium on equity
of XYZ Ltd. is 8.025% above the risk free rate and the expected return on the market
portfolio is 14.50%, then the Beta of the company will be __________________.
(Write answer upto Two decimal places)
Case Sensitivity: No
Answer :
Possible Answer: NA
Given .93 ( ROUNDED OFF)
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172313
Status : Answered
Marks : 0

Q.8 __________ involves splitting up a large company such as a conglomerate

comprising of different divisions, into separate companies.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given DEMERGER
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172324
Status : Answered
Marks : 1

Q.9 Vertical analysis is useful in comparing the performance of several companies in

the _________ group.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given SAME GROUP
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172327
Status : Answered
Marks : 1

Q.10 When a business is able to earn profits at a rate higher than that at which a similar
business earns, the former business is said to possess __________.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given SUPER PROFITS
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172325
Status : Answered
Marks : 0

Q.11 A company has an issued and paid up capital of 5,00,000 shares of Rs.10 each. The
company declared a dividend of Rs.150 lakh during the last five years and expects
to maintain the same level of dividends in the future. If the average cost of equity
for the listed companies in the same line of business is 15% then value per share of
the company will be Rs. ______________
Case Sensitivity: No
Answer :
Possible Answer: NA
Given 40
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172330
Status : Answered
Marks : 0

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Q.12 ___________ Price Policy is the system of charging high prices for new products to
“Skim the Cream” from the market.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given sieri
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172323
Status : Answered
Marks : 0

Q.13

Case Sensitivity: No
Answer :
Possible Answer: NA
Given 80
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172319
Status : Answered
Marks : 1

Q.14 Uncertainty is not a part of project risk. Is this statement true or false
Case Sensitivity: No
Answer :
Possible Answer: NA
Given YES
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172329
Status : Answered
Marks : 1

Q.15 Efficiency consists of two main component __________ efficiency and _____
efficiency
Case Sensitivity: No
Answer :
Possible Answer: NA
Given ALLOCATIVE , TECHNOLOGICAL
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172322
Status : Answered
Marks : 0.5

Q.16 The Z-Score model is a quantitative model developed by __________ to predict

bankruptcy or financial distress of a business.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given ALTMAN
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172314
Status : Answered
Marks : 1

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Q.17 As per Altman (1968), if the Calculated Value of Z-score is greater than _________, it
is predicted that the firm belongs to non-bankrupt class.
Fill in the blank by using figure/s or word/s as stated above.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given 2.99
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172320
Status : Answered
Marks : 1

Q.18 _________ is a tool of Financial Statement Analysis which shows what are those
financial parameters which are driving the profitability of a company.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given RATIO ANALYSIS
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172331
Status : Answered
Marks : 0

Q.19 Normal profit is part of implicit cost. Is this statement true or false
Case Sensitivity: No
Answer :
Possible Answer: NA
Given FALSE
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172328
Status : Answered
Marks : 1

Q.20 What will be the Market to Book Value Ratio, if ANZ Ltd. has a P/E ratio of 25 and a
Return on Equity (ROE) of 14% ?
Case Sensitivity: No
Answer :
Possible Answer: NA
Given 3.5
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172321
Status : Answered
Marks : 1

Section : One LAQ

Q.1 “Commercial banks in India are required to invest in the Government of India bonds
a requirement of the Statutory Liquidity Ratio. Do you believe that the Government
of India bonds do not have any kind of risk for the banking sector in India?”
Support your answer with suitable reasoning.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172332
Status : Not Answered
Marks : 0

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Q.2 The following financial data related to XYZ Limited for FY 2019-20 and FY 2020-21 has been extracted from the Annual Report 2020-21.

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Using the information and suitable Du-Pont Analysis you are required to answer the following:

(i) Calculate the return an equity and changes in it over both year.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172333
Status : Not Answered
Marks : 0

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Q.3 The following financial data related to XYZ Limited for FY 2019-20 and FY 2020-21 has been extracted from the Annual Report 2020-21.

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Using the information and suitable Du-Pont Analysis you are required to answer the following:

(ii) Margin for both years

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172334
Status : Not Answered
Marks : 0

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Q.4 The following financial data related to XYZ Limited for FY 2019-20 and FY 2020-21 has been extracted from the Annual Report 2020-21.

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Using the information and suitable Du-Pont Analysis you are required to answer the following:

(iii) Asset utilization for the two years

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172335
Status : Not Answered
Marks : 0

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Q.5 The following financial data related to XYZ Limited for FY 2019-20 and FY 2020-21 has been extracted from the Annual Report 2020-21.

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Using the information and suitable Du-Pont Analysis you are required to answer the following:

(iv) Asset leverage for the two years and changes in it

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172336
Status : Not Answered
Marks : 0

Section : Two LAQ

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Q.1 X Limited wants to takeover Y Limited and their Summarized Balance Sheets are given below:

Using the above information, what should be the share exchange ratio to be offered to the shareholders of Y
Limited by X Limited based on:

(i) Net Worth [3]

(ii) Earning Per Share (EPS) [2]
(iii) Market Price [2]
Case Sensitivity: No
Answer :
Possible Answer: NA
Given exchange ratio i)Net worth = .41666 0r .4167 ( X will issue .41667 share for 1 share of Y) ii) Earning per share
Answer : =.6666 or .67 ( X will issue .6666 share for 1 share of Y) iii)market price = 1.28 (X ltd will issue 1.28 shares for 1
share of Y limited)

Subjective Answer
Question Type :
Question
Question ID : 9583172337
Status : Answered
Marks : 4

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Q.2 X Limited wants to takeover Y Limited and their Summarized Balance Sheets are given below:

Assuming that there are no synergy gains, then determine the EPS after merger if the exchange ratio is based on
Net Worth.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given EPS = 4.4958 OR 4.50 ( rounded off)
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172338
Status : Answered
Marks : 1

Q.3 If a company has a P/E Ratio of 12 and a ROE of 17.5%, then you are required to
determine its Market to Book Value ratio.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given Market to Book Value ratio 2.1
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172339
Status : Answered
Marks : 1.5

Section : Three LAQ

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Q.1 PR Ltd. implemented a quality improvement programme and had the following
results:
(All Rs. In 000’s)

Determine the cost of prevention and its percentage to sales

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Prevention cost = 37.5(2019) percentage to sales = 1.25% prevention cost =75(2020)
Answer : percentage to sales = 2.5%

Subjective Answer
Question Type :
Question
Question ID : 9583172340
Status : Answered
Marks : 2

Q.2 PR Ltd. implemented a quality improvement programme and had the following
results:
(All Rs. In 000’s)

Determine the cost of appraisal of quality and its percentage to sales

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Cost of appraisal 140 (2019) 150 (2020) percentage to sale 4.67%(2019) 5% (2020)
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172341
Status : Answered
Marks : 2

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Q.3 PR Ltd. implemented a quality improvement programme and had the following
results:
(All Rs. In 000’s)

Determine the cost of internal failure and its percentage to sales

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Cost of Internal Failure 2019= 550 2020=350 Percentage to sale 2019= 18.33% 2020 =
Answer : 11.67%

Subjective Answer
Question Type :
Question
Question ID : 9583172342
Status : Answered
Marks : 2

Q.4 PR Ltd. implemented a quality improvement programme and had the following
results:
(All Rs. In 000’s)

Determine the cost of external failure and its percentage to sales and the total
quality costs
Case Sensitivity: No
Answer :
Possible Answer: NA
Given cost of external Failure, 2019= 150 2020 = 75 Percentage to sales 2019 = 5% 2020 =
Answer : 2.5%

Subjective Answer
Question Type :
Question
Question ID : 9583172343
Status : Answered
Marks : 1

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Q.5 PR Ltd. implemented a quality improvement programme and had the following
results:
(All Rs. In 000’s)

(v) Compute the amount of increase in profit, if any, due to quality improvement.
Case Sensitivity: No
Answer :
Possible Answer: NA
Given 227.5
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172344
Status : Answered
Marks : 1

Q.6 What are the exceptions of Law of Demand?

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Exceptions of Law of demand, 1.Giffen goods, 2.Inferior goods, 3.luxurious goods,
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172345
Status : Answered
Marks : 1

Section : Four LAQ

Q.1 M/s ABC, an Acquiring Company is considering the acquisition of Target Company in a stock-for-stock
transaction in which target Company would receive Rs.90 for each share of its common stock.
M/s ABC, the Acquiring company does not expect any change in its price/earnings ratio multiple after the
merger and chooses to value the target company conservatively by assuming no earnings growth due to
synergy.

Calculate the following:

(i) The purchase price premium [1]

(ii) The exchange ratio [2]

Case Sensitivity: No
Answer :
Possible Answer: NA
Given i)3o ii) 1.8 (acquiring company will issue 1.8 shares for 1 share of target company)
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172346
Status : Answered
Marks : 2

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Q.2 M/s ABC, an Acquiring Company is considering the acquisition of Target Company in a stock-for-stock
transaction in which target Company would receive Rs.90 for each share of its common stock.
M/s ABC, the Acquiring company does not expect any change in its price/earnings ratio multiple after the
merger and chooses to value the target company conservatively by assuming no earnings growth due to
synergy.

Calculate the following:

(i) The number of new shares issued by the acquiring company [1]

(ii) Post-merger EPS of the combined firms. [2]

Case Sensitivity: No
Answer :
Possible Answer: NA
Given i)36000 ii)2.208
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172347
Status : Answered
Marks : 0.5

Q.3 M/s ABC, an Acquiring Company is considering the acquisition of Target Company in a stock-for-stock
transaction in which target Company would receive Rs.90 for each share of its common stock.
M/s ABC, the Acquiring company does not expect any change in its price/earnings ratio multiple after the
merger and chooses to value the target company conservatively by assuming no earnings growth due to
synergy.

Calculate the following:

(i) Pre-merger EPS of the Acquiring company [1]

(ii) Pre-merger P/E ratio [1]

Case Sensitivity: No
Answer :
Possible Answer: NA
Given i)2.272( rounded off) ii)22
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172348
Status : Answered
Marks : 1

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Q.4 M/s ABC, an Acquiring Company is considering the acquisition of Target Company in a stock-for-stock
transaction in which target Company would receive Rs.90 for each share of its common stock.
M/s ABC, the Acquiring company does not expect any change in its price/earnings ratio multiple after the
merger and chooses to value the target company conservatively by assuming no earnings growth due to
synergy.

Calculate the following and Comment on the results:

(i) Post-merger share price. [2]

(ii) Post-merger equity ownership distribution.[2]

Case Sensitivity: No
Answer :
Possible Answer: NA
Given i)48.5958 or 48.60(rounded off) ii)Target co. 36000 share @ 48.6 =1749600 Acquiring Company 110000 share
Answer : @48.6 =5346000 here share is after rounding off. IF calculation is done on 48.5958 then total value of the
company is 7095000.

Subjective Answer
Question Type :
Question
Question ID : 9583172349
Status : Answered
Marks : 1

Section : Five LAQ

Q.1 State the Significance of Financial Performance Analysis.

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172350
Status : Not Answered
Marks : 0

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 Page 26 of 30

Q.2 The following financial data related to the Balance Sheet of ADANI LTD.
for FY 2020 – 21 has been extracted from the Annual Report 2020 – 21.

Additional Information:

• Market Price of ADANI LTD. share having a face value of Rs 10 as on the Balance Sheet date was Rs
870.
• Operating Profit of the Company for the year was Rs 8656 lakh.
• Operating Profit Margin of the Company is 16.25%.

Using the above information and Altman’s Multiple Discriminate Function, you are required to
calculate Z-score of ADANI LTD. as per the Z-Score Model of Altman (1968).
Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172351
Status : Not Answered
Marks : 0

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 Page 27 of 30

Q.3 The following financial data related to the Balance Sheet of ADANI LTD.
for FY 2020 – 21 has been extracted from the Annual Report 2020 – 21.

Additional Information:

• Market Price of ADANI LTD. share having a face value of Rs 10 as on the Balance Sheet date was Rs
870.
• Operating Profit of the Company for the year was Rs 8656 lakh.
• Operating Profit Margin of the Company is 16.25%.

Comment on the financial position of ADANI LTD.

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172352
Status : Not Answered
Marks : 0

Section : Six LAQ

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Q.1 Write Short Notes on Market value added (MVA)

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Market value added is a measure whether company is able to genrate sufficient to
Answer : meet its cost of capital employed in the organisation, its is measured through
Retrun on capital employed less cost of the capital multiplying with capital
employed in the organisation.

Subjective Answer
Question Type :
Question
Question ID : 9583172357
Status : Answered
Marks : 0

Q.2 Write Short Notes on Difference between fair value and market value
Case Sensitivity: No
Answer :
Possible Answer: NA
Given Market value refers to the value prevailing in the market or share value of the
Answer : organisation in the value, Fair value refers to the net value of share againt
companies net assets. market value involves market fluctions and Fair value
involves less market impact. market value can be get through EPS of the company *
profit earning ratio of the company fair value can be calculated through market
value per share + market value as per dividend yield divided by 2. market value is a
measure of comapnies growth in the market.

Subjective Answer
Question Type :
Question
Question ID : 9583172356
Status : Answered
Marks : 0

Q.3 Write Short Notes on Risk Mapping

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Risk mapping is a process of identifying the risk and preparing a strategy to control
Answer : the risk or avoid the future risk. Risk mapping involves the steps to mitigate the
future risk thorugh various strategies and plans, it includes to acertain the type of
risk and the effect of that risk factor on the organisation or market.\ after this
preventive plans are made to avoid the risk or reduce the effect of the risk on the
organisation, risk mapping can be called as a process to identify, Control,
avoidance of the risk.

Subjective Answer
Question Type :
Question
Question ID : 9583172355
Status : Answered
Marks : 0.5

Q.4 Write Short Notes on OLAP Server

Case Sensitivity: No
Answer :
Possible Answer: NA
Given --
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172353
Status : Not Answered
Marks : 0

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 Page 29 of 30

Q.5 Write Short Notes on Customer Relationship Management

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Customer relationship management is an integrated approach to manage relations
Answer : with the customer it is focused on attracting new customer and retaining the
customers and earning their loyalty and trust towards the organisation,it has three
major approach 1. Analytical.2.operative.3.collobrative. There are following benifits
of customer relationship management. 1.Retention of customers,and attracting new
customers, 2.Enhanced brand value and loyalty, 3. Increased quality and revenues,
4.fulfillment of the objectives of the organisation. 5. Reduction in cost and process
improvement.

Subjective Answer
Question Type :
Question
Question ID : 9583172354
Status : Answered
Marks : 1

Section : Section D Case Study Question

Q.1 M/s Shah Ltd had earned a PAT of Rs.48 Lakhs for the year just ended. It wants you
to ascertain the value of its business, based on the following information.
(i) Tax Rate for the year just ended was 36%. Future Tax rate is estimated at 34%
(ii) The Company’s Equity Shares are quoted at Rs.120 at the Balance Sheet date.
The Company had an Equity Capital of Rs.100 Lakhs, divided, into Shares of Rs.50
each.
(iii) Profits for the year have been calculated after considering the following in the P
& L Account:

• Subsidy Rs.2 Lakhs received from Government towards fulfillment of certain

social obligations.
• The Government has withdrawn this subsidy and hence, this amount will not be
received in future.
• Interest Rs.8 Lakhs on Term Loan. The final installment of this Term Loan was
fully settled in the last year.
• Managerial Remuneration Rs.15 Lakhs. The Shareholders have approved an
increase of Rs.6 Lakhs in the overall Managerial Remuneration, from the next year
onwards.
• Loss on sale of Fixed Assets and Investments amounting to Rs.8 Lakhs.

Compute the ‘Future Maintainable Profits’ of M/s Shah Limited.

Case Sensitivity: No
Answer :
Possible Answer: NA
Given Future Maintainable Profits = 54.78 Lakhs.
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172358
Status : Answered
Marks : 3

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 Page 30 of 30

Q.2 M/s Shah Ltd had earned a PAT of Rs.48 Lakhs for the year just ended. It wants you
to ascertain the value of its business, based on the following information.
(i) Tax Rate for the year just ended was 36%. Future Tax rate is estimated at 34%
(ii) The Company’s Equity Shares are quoted at Rs.120 at the Balance Sheet date.
The Company had an Equity Capital of Rs.100 Lakhs, divided, into Shares of Rs.50
each.
(iii) Profits for the year have been calculated after considering the following in the P
& L Account:

• Subsidy Rs.2 Lakhs received from Government towards fulfillment of certain

social obligations.
• The Government has withdrawn this subsidy and hence, this amount will not be
received in future.
• Interest Rs.8 Lakhs on Term Loan. The final installment of this Term Loan was
fully settled in the last year.
• Managerial Remuneration Rs.15 Lakhs. The Shareholders have approved an
increase of Rs.6 Lakhs in the overall Managerial Remuneration, from the next year
onwards.
• Loss on sale of Fixed Assets and Investments amounting to Rs.8 Lakhs.

Compute the ‘Capitalization rate’ of Shah Limited.

Case Sensitivity: No
Answer :
Possible Answer: NA
Given 22.825%
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172359
Status : Answered
Marks : 0

Q.3 M/s Shah Ltd had earned a PAT of Rs.48 Lakhs for the year just ended. It wants you
to ascertain the value of its business, based on the following information.
(i) Tax Rate for the year just ended was 36%. Future Tax rate is estimated at 34%
(ii) The Company’s Equity Shares are quoted at Rs.120 at the Balance Sheet date.
The Company had an Equity Capital of Rs.100 Lakhs, divided, into Shares of Rs.50
each.
(iii) Profits for the year have been calculated after considering the following in the P
& L Account:

• Subsidy Rs.2 Lakhs received from Government towards fulfillment of certain

social obligations.
• The Government has withdrawn this subsidy and hence, this amount will not be
received in future.
• Interest Rs.8 Lakhs on Term Loan. The final installment of this Term Loan was
fully settled in the last year.
• Managerial Remuneration Rs.15 Lakhs. The Shareholders have approved an
increase of Rs.6 Lakhs in the overall Managerial Remuneration, from the next year
onwards.
• Loss on sale of Fixed Assets and Investments amounting to Rs.8 Lakhs.

Compute ‘Value of Business’ of Shah Limited.

Case Sensitivity: No
Answer :
Possible Answer: NA
Given 240 Lakhs
Answer :

Subjective Answer
Question Type :
Question
Question ID : 9583172360
Status : Answered
Marks : 0

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