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DMBA 202- FINANCIAL MANAGEMENT

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DMBA 202- FINANCIAL MANAGEMENT

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Assignment

Description

 

SESSION MARCH 2023
PROGRAM MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER II
course CODE & NAME DMBA202 FINANCIAL MANAGEMENT
CREDITS 4
nUMBER OF ASSIGNMENTS & Marks 02

30 Marks each

 

Assignment Set – 1

 

  1. Assuming wealth maximization to be the objective of financial management, show how the financing, investment and dividend decisions of the company can help to attain this objective.

 

 

  1. Surya Ltd. has the following book value capital structure:

               Million (Rs.)

Equity Capital (10 million shares, Rs.10 par)                  100

Preference Capital, 11% (100000 shares Rs.100)             10

Retained earnings                                                              120

Debentures, 13.5% (500000 debentures Rs.100)              50

Term loans 12%                                                                  80

                                                                                              360

The next expected dividend per share is Rs.1.50. The dividend per share is expected to grow at the rate of 7%. The market price per share is Rs.20. Preference stock, redeemable after 10 years is currently selling for Rs.75 per share. Debentures, redeemable after 6 years are selling for Rs.80 per debenture. The tax rate for the company is 50%.

Calculate the weighted average cost of capital using:

  • Book value proportions and
  • Market value proportions.

First identify the different costs and proportions.

 

  1. Examine the various techniques employed to adjust the time value of money.

 

 

Assignment Set – 2

 

  1. The following information has been extracted from the cost sheet of a company:

                                 Rs. Per unit

Raw materials              45

Direct labour                         20

Overheads                  40

Total                            105

Profit                             15

Selling Price                 120

The following further information is available:

  • Raw materials are in stock on an average two months
  • The materials are in process on an average for 4 weeks. The degree of completion is 50% in all respects
  • Finished goods stock on an average is for one month
  • Time lag in payment of wages and overheads is 1 ½ weeks.
  • Time lag in receipt of proceeds from debtors is 2 months
  • Credit allowed by suppliers is one month
  • 20% of the output is sold against cash.
  • The company expects to keep a cash balance of Rs.10000
  • Take 52 weeks per annum.
  • Calculation of debtors may be made at a selling price.
  • The company is poised to manufacture 14400 units in the year.

You are required to prepare a statement showing the working capital requirements of the company.          

  Are there any considerations other than profitability to be made in managerial decisions about investment proposals? Explain these.

 

Additional information

Assignment Type

General, Unique

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