1ST SEM NMIMS DEC 2019 SOLVED ASSIGNMENTS, 2ND SEM NMIMS DEC 2019 SOLVED ASSIGNMENTS, 3RD SEM NMIMS DEC 2019 SOLVED ASSIGNMENTS, 4TH SEM NMIMS DEC 2019 SOLVED ASSIGNMENTS.

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Corporate Finance
1. Assume that ABC Ltd has equity share capital of ₹15,00,000 divided into shares of
Rs150 each. The company wishes to raise additional total capital of ₹6,00,000 for
expansion through ₹3,00,000 in equity shares and ₹3,00,000 in debts at 10%. The
EBIT of the company is ₹3,00,000 and tax rate is 50%. Calculate EPS. Suggest what will
happen to EPS if entire capital was raised through debts. (10 Marks)
2. Alpha Ltd is expecting an annual Earnings Before Interest and Tax of ₹1,50,000. The
company had 10% debentures of ₹ 5 Lakhs. Calculate the overall cost of capital of the
firm if the cost of Equity is 12% assuming NI approach in the calculation. Suggest what
happens to the value of the firm when more debentures are issued. (10 Marks)
3. Mr. Mehta works as a Management Consultant in XYZ Ltd and his role involved
analyzing capital investment projects. His manager asked him to analyze project X
which involved capital investments of ₹10,00,000 and the cost of capital of 12%. The
projects net cash flows are as follows:
Years 1 2 3 4 5
Cash
Inflo
w
20,00
0
30,00
0
40,00
0
45,00
0
50,00
0

2. Calculate:
a. Net Present Value of the project and suggest whether project is to be accepted or not.
(5 Marks)
b. Internal rate of return and suggest whether project is to be accepted or not (5
Marks)
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