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FINANCIAL MGMT
(A). (1).Mr. Nimish holds the following portfolio. (10 marks)
Share Beta Investment
Alpha 0.9 Rs.12, 00,000
Beta 1.5 Rs. 3, 50,000
Carrot 1.0 Rs. 1, 00,000
What is the expected rate of return on his portfolio, if the risk rate is 7 per cent and the
expected return on the market portfolio is 16 per cent?
(A). (2). A share is selling for Rs.60 on which a dividend of Rs.4 per share is expected at the end of the year. The expected market price after dividend declaration is to be Rs.70. Compute the following: - (10 marks)
(i) The return on investment ® in shares.
(ii) Dividend yield
(iii) Capital Gain Yield
(B) DIC Ltd. provides the following data: (20 marks)
Comparative trial balance
March 31 year 2 March 31 year 1 Increase(Decrease)
Debit Balance 20 10 10
Cash Rs.190 Rs. 90 Rs.100
Working capital (other than cash) 100 200 (100)
Investment (Long term) 500 400 100
Building and equipment 40 50 (10)
Total 850 750 100
Credit
Accumulated Depreciation 200 160 40
Bonds 150 100 50
Reserves 350 350 ---
Equity Shares 150 140 10
3
Total 850 750 100
Income Statement
For the period ending March 31, year 2
(Amount in Rs lakh)
Sales Rs.1000
Cost of Goods Sold 500
Selling Expense Rs.50
Administrative Expenses 50 100
Operating Income 400
Other charges
Gain on sale of building and equipment Rs 5
Loss on sale of investments (10)
Interest (6)
Taxes (189) (200)
Net Income after taxes 200
Notes: (a) The depreciation charged for the year was Rs.60 Lakh
(b) The Book value of the building and equipment disposed was Rs 10 Lakh
(c)
Prepare a Cash Flow Statement (Based on AS-3)
(C). (1). A. Ltd. produces a product which has a monthly demand of 4,000 units. The product
requires a component X...