sfm final paper-nov 13.pdf

8/14/2019 sfm final paper-Nov 13.pdf

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Sanjay Saraf Educational institute Pvt. Ltd.

Sanjay Saraf Educational Institute Pvt. Ltd.

SOLUTION AND FEEDA!" FO# !A FINAL NO$ %&'( SF)

E*A) + SAN,A+ SA#AF SI#

T-is is y feed/ac0 to t-e SF) Nov '( 1a1er 3-ic- 3as full of ista0es and ai4uitiesand ofcourse certain 4ood tou4- sus.T-e intention of t-is 3rite u1 is not to 1roote or

advertise yself 5nor to deean or disres1ect any 1erson or entity.T-e sole intention is tos-are y vie3s 3it- t-ousands of students 3-o too0 t-e e6a after ta0in4 y classes

and t-ose t-at are 3aitin4 in line to ta0e e6a in future.

7'. 8a9 A! Ltd issued :;5


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f'% '%>'.&%8&.? '

''.%;

f%(for t-e ar0et ''.%&.< '&.?


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i9 Biven 1ortfolio co1osition >ERuity s-ares Q #s K< la0-s 3it- a eta of '.!as- Q#s '< La0-s 3it- a eta of &

Portfolio eta i.e. P ei4-ted Avera4e

8K K< La0-s>(.%; of K< La0-s K%.%K La0-s5 3it- a eta of '.!as- Q '< La0-s 3it- a eta of &.

Nifty Futures Q '&& La0-s >% ; of '&& La0-s :K La0-s5 3it- a eta of ' 8Noinvestent9.

ence P 8K%.%K G '. H '< G & H :K G '9= 8K%.%K H '


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Solution@

)y !oent

TIS IS A ST#AIBT FO#A#D SU) ON !#OSS #ATES IN FO#E* 8SI)ILA# TOTE ONB "ONB DOLLA# SU) TAT APPEA#ED LAST TI)E AND IS TE#E IN

OU# )AT9. OE$E#5 IT AD A !OI!E OF !O$E# T#OUB LONDON O# N+

AND SO STUDENTS NEEDED TO DO TE SU) TI!E. NO ISSUES IT TAT. IILL ALSO NOT A!!EPT AN+ ALII F#O) STUDENTS #EBA#DINB TE FA!T

TAT UN"NON !U##EN!IES !A)E IN TE E*A). IN !LASS5 E A$E

ALA+S STUDIES FO#E* ITOUT AN+ ATTA!)ENT TO AN+ !U##EN!+> ITSALL A= STUFF AND DOESNT )ATTE# ETE# A AND #EFE# TO D""5 S"#5

SAD O# AT NOT.

I "NO )OST OF )+ STUDENTS A#E SUPE#L+ E*PE#T IN !O)PUTINB!#OSS #ATES AND TE+ OULD A$E DONE IT UT UNFO#TUNATEL+ TE

SU) AS #ONB. TE SE!OND 7UOTE SOULD A$E EEN )U)AI>NE

+O#" INSTEAD OF LONDON>NE +O#".

OF !OU#SE5 IF ONE OULD A$E APPLIED !O))ON SENSE + LOO"INB AT

TE FIBU#ES5 ONE OULD A$E UNDE#STOOD ITS #UPEE PE# DOLLA#.OE$E#5 I DONT TIN" E NEED TO )A"E STUDENTS LIALE FO# 'ST

UNDE#STANDINB )ISTA"ES5 !O##E!TINB TE SA)E AND TEN ANSE#INB7UESTIONS .I!AI SOULD ETTE# I)P#O$E TEI# U)AN AND TE!NI!AL

INF#AST#U!TU#E TO A$OID TESE )ISTA"ES. TE+ )UST BI$E FULL )A#"S

8IN FA!T DOULE TE )A#"S9 TO ALL STUDENTS FO# TE F#UST#ATIONAND TI)E ASTABE !AUSED AS A #ESULT OF SU! )ISTA"E.

T-e dealer -as 4one s-ort on D"" '& La0-s D"" ' #s . London 8#S= Pound9 ?.(&&&V ?.(%&&London>!o1en-a4en 8D"" = Pound9 ''.%&&V ''.(


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Profit 8.&(>%&''5 a dividend 3as 1aid '& ; andannualiXed yield 3as '%&;. On ('>&(>%&'%5 a %& ; dividend and ca1ital 4ain of &.& 1erunit 3as 4iven5 )r. * redeeed all -is %?'.:K units 3-en -is annualiXed yield 3as?'.&(>%&'%5 and ('>&(>%&'(

For calculations consider a year of '% ont-s.

Solution@

)y !oent@

TIS IS A DI#E!T SU) OF )UTUAL FUND F#O) OU# )AT.

e4innin4 1urc-ase 1rice NA$ '&AnnualiXed #eturn '%&;

T-erefore5 return for : ont-s '%& G :='% :& ;

So5 endin4 $alue= unit s-ould /e'& H :&; of '&

':T-is includes dividend of #e. ' = unit

So5 NA$ on ('.(.%&'' ': >''K

Also aount re>invested ('.(.'%8 ' year9

Dividend 1er unit %& ; of '& %T-erefore5 total dividend


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NA$ '&.%on ('.(.%&'%Total oldin4 1eriod % years : ont-s

AnnualiXed #eturn ?'.


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Ste1 >'

!alculation of #)Particulars of securities !ost Dividend )ar0et $alue

Bold ''5&&& '5K&& '%5&&&Silver '5&&& '5&&& '?5%&&ronXe '%5&&& K&& 'K5&&&BOI onds &5&&& 5&&& (?5@

@

#P #FH 8#)Q#F9 G

' H 8'.K>'9 G ' H %.K

Bold ' H %.KG &. '


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It is no3 ,une (&t-. Follo3in4 Ruotations re4ardin4 rates of e6c-an4e5 USW 1er !anW5fro t-e firZs /an0 3ere o/tained@

S1ot ' )ont- For3ard ( )ont- For3ard

&.:%K>&.:%KK &.:(&' &.:(


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Alternative '@For3ard !over

uy !anW '&5 '&5&&& 'f &.:(&'

T-erefore5 Outflo3 after' ont- '&5 '&5&&& G &.:(&'USW :5 (:5&'uy !anW ?5 &


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'.' !ontracts rounded off to ' contracts

So aount covered /y o1tion ' G


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rate is (& ;.Post ta6 cost of ca1ital of A! Ltd. is '&;.+ou are reRuired to advice @

i. -et-er t-e ac-ine s-ould /e /ou4-t or ta0en on lease.ii. Analyse t-e financial via/ility fro t-e 1oint of vie3 of t-e lessor assuin4

'% ; 1ost ta6 cost of ca1ital.

P$ of #e. ' '&; for < years P$ of #e. ' '% ; for < years

' &.:&: &.K:(

% &.K% &.?:?

( &.?


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De1reciation of t-e ac-ine and 3ill also 4ain Salva4e value at t-e end of < years.!ost of orro3in4 Present $alue of Installents Q P$ of Interest Ta6 S-ield Q P$ ofDe1reciation Ta6 S-ield Q P$ of Salva4e $alue

a9 Let Loan Installent 6

'&&&&&& 6 H 6 P$IFA8'%;5 96 H (.&(K6 '&&&&&&6 %??

P$ of INstallents "c %?? H %?? P$IFA8'&;5 9 %?? 6 (.': '&(%& ............................................. 8a9

/9 Interest tA6 S-ield

+ears Atoutstandin4

Interest '%;

Princi1alPortion

Installent InterestTa6

S-ield

P$ '&;

& '&&&&&& > %?? %?? > >

' ?


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'&(%& Q > > > > Post Ta6 Lease

#ent> 'K&&& 'K&&& 'K&&& 'K&&& 'K&&&

! De1reciation Ta6S-ield

> K&&& K&&& K&&& K&&& K&&&

D Salva4e $alue > > > > > %&&&&&Net !as- Flo3s8/HcHd>a9

8'&&&&&&9 %'&&& %'&&& %'&&& %'&&& '&&&

P$ '%; 8'&&&&&&9 ':%KKK '?%'


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8>9 !oission c-ar4ed u1front %; of '


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!alculate@i9 P=E ratioii9 onus #atioiii9 )ar0et 1rice of s-are /efore and after t-e issue of /onus s-ares.

iv9 Free Float )ar0et !a1italiXation of t-e !o1any after t-e /onus s-ares.

Solution@

)y !oent

$E#+ BOOD !O))ON SENSE O#IENTED SU). AN+ONE O #EAD TE SU)

P#OPE#L+ OULD E ALE TO SOL$E IT ITOUT AN+ P#IO# P#EPA#ATION.

TE !ON!EPT OF F#EE FLOAT )A#"ET !APITALI[ATION AS EEN !O$E#EDIN !LASS.

i9Particulars Aount

ProoterZs sta0e 8K;9 ( La0-s s-aresTotal No. of s-ares (=&.K ?< La0-s s-aresNo. of s-ares -eld /y inority '% La0-s s-aresFree Float )ar0et !a1italiXation ':.%& crores i.e. ':%& La0-sS-are 1rice ':%&='% '&PAT K& La0-sEPS K&=?


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K&=K 1er unit.

Annual !as- Flo3 #s.


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UDBETINB. E AD DONE IT $E#+ ELAO#ATEL+ IN !LASS.OE$E#5 E

AD ALA+S !A##IED OUT SENSITI$IT+ ANAL+SIS ILE TE SU) STATES

TAT SENSITI$IT+ AS AL#EAD+ EEN !A##IED OUT AND TE #ESULTS A#EBI$EN. SO E A#E SUPPOSED TO DO A!" !AL!ULATION AND !O)PUTE

)ISSINB FIBU#ES.

I PE#SONALL+ A$E NO ISSUES IT IT AND OULD !ONB#ATULATE I!AIFO# SETTINB SU! A SU). OE$E#5 E "NO TAT TE#E A#E %

)ETODS OF !ONDU!TINB SENSITI$IT+ ANAL+SIS>

)ETOD '>SO!" APP#OA!>E SO!" EA! FA!TO# + A !E#TAIN ; ANDFIND OUT TE ; EFFE!T ON NP$

)ETOD %>E FIND OUT TE )A#BIN OF SAFET+ FO# EA! FA!TO#.

TE SE!OND PA#AB#AP OF TE SU) IS NOT !LEA#. IT STATES TAT TEFI*ED !OST SENSITI$IT+ IS ?.K';.AT IS TIS E#E IS E#E TE

P#OLE) LIES >TE+ SOULD A$E !LEA#L+ )ENTIONED TAT ITS )A#BIN

OF SAFET+>AD TE+ )ENTIONED TAT )OST OF )+ STUDENTS OULD E

ALE TO DO TE SU).

i9 Initial Investent P$ of future cas- flo3s discounted I##


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So5 t-e fi6ed cost #s. '5 &&5&&&

iv9 $aria/le !ost #s. &=>P$ #atio ?& ;

So5 Sellin4 Price &=(&; %&&

Annual cas- flo3


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3ould /e deer4ed and dis1osed of for #s. %5 &&5&&&.(. T-e !o1anyZs cost of ca1ital is ' ;

)a0e a re1ort to t-e oard of t-e !o1any advisin4 t-e a/out t-e financialfeasi/ility of t-is acRuisition.

Net Present $alues for ' ; for #e. ' are as follo3s@+ears@ ' % ( <

P$@ &.K% &.?( &.' &. !alculation of /enefit fro t-eacRuisition>

a9 !as-


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is '.< and sells UT I TIN" I ETTE# OLD

A!" )+ P#AISE TILL TE TI)E TE+ !O)E IT !O##E!T SOLUTION AS I

A$E DONE E#E.

E6istin4 eta of #aZs Lon4 Q s-ort 1osition 8'&&&&G %% G '.< Q (.

sfm final paper-nov 13.pdf

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