Using the concept of financial leverage

Finance Management

Questions:

Q1. ”The modern approach is an improvement over the traditional approach of financial management.”Do you agree?

Q2. A company has Rs.200000 as EBIT .It has Rs.1000000,10% debentures .The equity capitalization rate (Ke)of the company is 12.5%.Find out the value of the firm under Net Income Approach. Also prove the NI approach.

Q3. A company earns Rs.5 per share ;it is capitalized at a rate of 10% and has a rate of return on investments of 16%. According to Walter’s model what should be the price per share at 50% dividend pay out ratio? Is this the optimum pay out ratio according to Walter?

Q4. ”The principal focus of finance is on decisions and actions which affect the value of the firm.”How can financial management help to maximize it?

Q5. Sales Rs.2000000, Variable cost Rs.600000, Fixed costs Rs.100000, Interest Rs.5000

Q6. Using the concept of operating leverage, by what percentage will EBIT increase,if there is a 10% increase in sales?

Q7.  Using the concept of financial leverage, by what percentage will EBT increase,if there is a 6% increase in EBIT?

Q8. Using the concept of combined leverage, by what percentage will EBT increase,if there is a 6% increase in sales? earnings before interest and taxes (EBIT)

Q9. ”It is the capital expenditure decision that spells the difference between the business success and business failure.”Do you agree with this statement? Substantiate your views with reasons.

Q10. X Ltd.,wishes to issue 1000 7% debentures of Rs.100 each for which the expenses of issue would be Rs.5 per debenture .Find out the cost of debenture capital.

Q11. ”Financial analysis requires an explicit consideration of the time value of money.” Elaborate.

 

Need Answer Sheet of this Question paper, contact

aravind.banakar@gmail.com

ARAVIND – 09901366442 – 09902787224

 

We are a team of highly committed professionals, who aim at helping Clients to achieve their Goals. We believe in establishing long-term relationships with our clients by delivering value added services of high quality. We are sensitive to our Clients requirements without compromising on values like Integrity and trust. Understanding the abilities, offering them Quality services and meeting our client’s requirements at the right time are our Forte.

 

We are in to this business since 14 years. And we are providing case study Answers, Assignment solutions, Multiple Question Answers and Project Reports of more than 40 + International B School (Indian and Foreign Universities)

 

Currently we are having more than 2, 00,000 Case study Answers. And 4,000 newly created Project Reports.

 

We are global leader in providing help to students for their assignments, projects, homework, Dissertation etc. Our ultimate aim is students best results and there long term relation with us. Our services are focused on, on time delivery, superior quality, creativity, and originality for every assignment we do.