MBA202
MBA202
MBA202
Note – Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.
Q. Set - I Total
Marks
No Questions Marks
From the below details, show the effect of the dividend policy on the market price of company
1
XYZ Ltd. shares using the Walter’s Model.
Equity capitalisation rate Ke is 10%
Earnings per share is given as Rs. 10
ROI (r) may be assumed as follows: 10% and 15%
Show the effect of the dividend policies on the share value of the firm for three different levels
of r, taking the DP ratios as 20%, 40%, 60%, 80% and 100%.
Q. Set - II Total
Marks
No Questions Marks
1 “Book value is an accounting concept”. Explain the factors of this concept.
Calculate the worth of the value of one share from the below details of Company ABC :
Current dividend is Rs. 10.
It expects to have a supernormal growth period running to 6 years during which the growth
rate would be 30%.
The company expects normal growth rate of 10% after the period of supernormal growth
period. The investor’s required rate of return is 18%.
factors explaining the concept of book value 5
10
Solution to the problem 5
Explain the capital Budgeting process and its appraisals
Solve the below given problem:
Given below are the details on the cash flows of two projects A and B.
Compute pay-back period for A and B.
Cash flows of A and B
Year Project A cash flows (Rs.) Project B cash flows (Rs.)
2 0 (4,50,000) (5,50,000)
1 3,00,000 2,00,000
2 1,50,000 2,50,000
3 50000 3,00,000
4 2,00,000 3,50,000
5 1,00,000 2,00,000
Explanation of capital budgeting process and its appraisals. 5
10
Solution for the problem 5
Explain EOQ and Re – order point.