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8/14/2019 sfm final paper-Nov 13.pdf
1/25
Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
SOLUTION AND FEEDA!" FO# !A FINAL NO$ %&'( SF)
E*A) + SAN,A+ SA#AF SI#
T-is is y feed/ac0 to t-e SF) Nov '( 1a1er 3-ic- 3as full of ista0es and ai4uitiesand ofcourse certain 4ood tou4- sus.T-e intention of t-is 3rite u1 is not to 1roote or
advertise yself 5nor to deean or disres1ect any 1erson or entity.T-e sole intention is tos-are y vie3s 3it- t-ousands of students 3-o too0 t-e e6a after ta0in4 y classes
and t-ose t-at are 3aitin4 in line to ta0e e6a in future.
7'. 8a9 A! Ltd issued :;5
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
f'% '%>'.&%8&.? '
''.%;
f%(for t-e ar0et ''.%&.< '&.?
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
i9 Biven 1ortfolio co1osition >ERuity s-ares Q #s K< la0-s 3it- a eta of '.!as- Q#s '< La0-s 3it- a eta of &
Portfolio eta i.e. P ei4-ted Avera4e
8K K< La0-s>(.%; of K< La0-s K%.%K La0-s5 3it- a eta of '.!as- Q '< La0-s 3it- a eta of &.
Nifty Futures Q '&& La0-s >% ; of '&& La0-s :K La0-s5 3it- a eta of ' 8Noinvestent9.
ence P 8K%.%K G '. H '< G & H :K G '9= 8K%.%K H '
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
Solution@
)y !oent
TIS IS A ST#AIBT FO#A#D SU) ON !#OSS #ATES IN FO#E* 8SI)ILA# TOTE ONB "ONB DOLLA# SU) TAT APPEA#ED LAST TI)E AND IS TE#E IN
OU# )AT9. OE$E#5 IT AD A !OI!E OF !O$E# T#OUB LONDON O# N+
AND SO STUDENTS NEEDED TO DO TE SU) TI!E. NO ISSUES IT TAT. IILL ALSO NOT A!!EPT AN+ ALII F#O) STUDENTS #EBA#DINB TE FA!T
TAT UN"NON !U##EN!IES !A)E IN TE E*A). IN !LASS5 E A$E
ALA+S STUDIES FO#E* ITOUT AN+ ATTA!)ENT TO AN+ !U##EN!+> ITSALL A= STUFF AND DOESNT )ATTE# ETE# A AND #EFE# TO D""5 S"#5
SAD O# AT NOT.
I "NO )OST OF )+ STUDENTS A#E SUPE#L+ E*PE#T IN !O)PUTINB!#OSS #ATES AND TE+ OULD A$E DONE IT UT UNFO#TUNATEL+ TE
SU) AS #ONB. TE SE!OND 7UOTE SOULD A$E EEN )U)AI>NE
+O#" INSTEAD OF LONDON>NE +O#".
OF !OU#SE5 IF ONE OULD A$E APPLIED !O))ON SENSE + LOO"INB AT
TE FIBU#ES5 ONE OULD A$E UNDE#STOOD ITS #UPEE PE# DOLLA#.OE$E#5 I DONT TIN" E NEED TO )A"E STUDENTS LIALE FO# 'ST
UNDE#STANDINB )ISTA"ES5 !O##E!TINB TE SA)E AND TEN ANSE#INB7UESTIONS .I!AI SOULD ETTE# I)P#O$E TEI# U)AN AND TE!NI!AL
INF#AST#U!TU#E TO A$OID TESE )ISTA"ES. TE+ )UST BI$E FULL )A#"S
8IN FA!T DOULE TE )A#"S9 TO ALL STUDENTS FO# TE F#UST#ATIONAND TI)E ASTABE !AUSED AS A #ESULT OF SU! )ISTA"E.
T-e dealer -as 4one s-ort on D"" '& La0-s D"" ' #s . London 8#S= Pound9 ?.(&&&V ?.(%&&London>!o1en-a4en 8D"" = Pound9 ''.%&&V ''.(
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
Profit 8.&(>%&''5 a dividend 3as 1aid '& ; andannualiXed yield 3as '%&;. On ('>&(>%&'%5 a %& ; dividend and ca1ital 4ain of &.& 1erunit 3as 4iven5 )r. * redeeed all -is %?'.:K units 3-en -is annualiXed yield 3as?'.&(>%&'%5 and ('>&(>%&'(
For calculations consider a year of '% ont-s.
Solution@
)y !oent@
TIS IS A DI#E!T SU) OF )UTUAL FUND F#O) OU# )AT.
e4innin4 1urc-ase 1rice NA$ '&AnnualiXed #eturn '%&;
T-erefore5 return for : ont-s '%& G :='% :& ;
So5 endin4 $alue= unit s-ould /e'& H :&; of '&
':T-is includes dividend of #e. ' = unit
So5 NA$ on ('.(.%&'' ': >''K
Also aount re>invested ('.(.'%8 ' year9
Dividend 1er unit %& ; of '& %T-erefore5 total dividend
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
NA$ '&.%on ('.(.%&'%Total oldin4 1eriod % years : ont-s
AnnualiXed #eturn ?'.
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
Ste1 >'
!alculation of #)Particulars of securities !ost Dividend )ar0et $alue
Bold ''5&&& '5K&& '%5&&&Silver '5&&& '5&&& '?5%&&ronXe '%5&&& K&& 'K5&&&BOI onds &5&&& 5&&& (?5@
@
#P #FH 8#)Q#F9 G
' H 8'.K>'9 G ' H %.K
Bold ' H %.KG &. '
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
It is no3 ,une (&t-. Follo3in4 Ruotations re4ardin4 rates of e6c-an4e5 USW 1er !anW5fro t-e firZs /an0 3ere o/tained@
S1ot ' )ont- For3ard ( )ont- For3ard
&.:%K>&.:%KK &.:(&' &.:(
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
Alternative '@For3ard !over
uy !anW '&5 '&5&&& 'f &.:(&'
T-erefore5 Outflo3 after' ont- '&5 '&5&&& G &.:(&'USW :5 (:5&'uy !anW ?5 &
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
'.' !ontracts rounded off to ' contracts
So aount covered /y o1tion ' G
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
rate is (& ;.Post ta6 cost of ca1ital of A! Ltd. is '&;.+ou are reRuired to advice @
i. -et-er t-e ac-ine s-ould /e /ou4-t or ta0en on lease.ii. Analyse t-e financial via/ility fro t-e 1oint of vie3 of t-e lessor assuin4
'% ; 1ost ta6 cost of ca1ital.
P$ of #e. ' '&; for < years P$ of #e. ' '% ; for < years
' &.:&: &.K:(
% &.K% &.?:?
( &.?
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
De1reciation of t-e ac-ine and 3ill also 4ain Salva4e value at t-e end of < years.!ost of orro3in4 Present $alue of Installents Q P$ of Interest Ta6 S-ield Q P$ ofDe1reciation Ta6 S-ield Q P$ of Salva4e $alue
a9 Let Loan Installent 6
'&&&&&& 6 H 6 P$IFA8'%;5 96 H (.&(K6 '&&&&&&6 %??
P$ of INstallents "c %?? H %?? P$IFA8'&;5 9 %?? 6 (.': '&(%& ............................................. 8a9
/9 Interest tA6 S-ield
+ears Atoutstandin4
Interest '%;
Princi1alPortion
Installent InterestTa6
S-ield
P$ '&;
& '&&&&&& > %?? %?? > >
' ?
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
'&(%& Q > > > > Post Ta6 Lease
#ent> 'K&&& 'K&&& 'K&&& 'K&&& 'K&&&
! De1reciation Ta6S-ield
> K&&& K&&& K&&& K&&& K&&&
D Salva4e $alue > > > > > %&&&&&Net !as- Flo3s8/HcHd>a9
8'&&&&&&9 %'&&& %'&&& %'&&& %'&&& '&&&
P$ '%; 8'&&&&&&9 ':%KKK '?%'
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
8>9 !oission c-ar4ed u1front %; of '
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
!alculate@i9 P=E ratioii9 onus #atioiii9 )ar0et 1rice of s-are /efore and after t-e issue of /onus s-ares.
iv9 Free Float )ar0et !a1italiXation of t-e !o1any after t-e /onus s-ares.
Solution@
)y !oent
$E#+ BOOD !O))ON SENSE O#IENTED SU). AN+ONE O #EAD TE SU)
P#OPE#L+ OULD E ALE TO SOL$E IT ITOUT AN+ P#IO# P#EPA#ATION.
TE !ON!EPT OF F#EE FLOAT )A#"ET !APITALI[ATION AS EEN !O$E#EDIN !LASS.
i9Particulars Aount
ProoterZs sta0e 8K;9 ( La0-s s-aresTotal No. of s-ares (=&.K ?< La0-s s-aresNo. of s-ares -eld /y inority '% La0-s s-aresFree Float )ar0et !a1italiXation ':.%& crores i.e. ':%& La0-sS-are 1rice ':%&='% '&PAT K& La0-sEPS K&=?
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
K&=K 1er unit.
Annual !as- Flo3 #s.
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
UDBETINB. E AD DONE IT $E#+ ELAO#ATEL+ IN !LASS.OE$E#5 E
AD ALA+S !A##IED OUT SENSITI$IT+ ANAL+SIS ILE TE SU) STATES
TAT SENSITI$IT+ AS AL#EAD+ EEN !A##IED OUT AND TE #ESULTS A#EBI$EN. SO E A#E SUPPOSED TO DO A!" !AL!ULATION AND !O)PUTE
)ISSINB FIBU#ES.
I PE#SONALL+ A$E NO ISSUES IT IT AND OULD !ONB#ATULATE I!AIFO# SETTINB SU! A SU). OE$E#5 E "NO TAT TE#E A#E %
)ETODS OF !ONDU!TINB SENSITI$IT+ ANAL+SIS>
)ETOD '>SO!" APP#OA!>E SO!" EA! FA!TO# + A !E#TAIN ; ANDFIND OUT TE ; EFFE!T ON NP$
)ETOD %>E FIND OUT TE )A#BIN OF SAFET+ FO# EA! FA!TO#.
TE SE!OND PA#AB#AP OF TE SU) IS NOT !LEA#. IT STATES TAT TEFI*ED !OST SENSITI$IT+ IS ?.K';.AT IS TIS E#E IS E#E TE
P#OLE) LIES >TE+ SOULD A$E !LEA#L+ )ENTIONED TAT ITS )A#BIN
OF SAFET+>AD TE+ )ENTIONED TAT )OST OF )+ STUDENTS OULD E
ALE TO DO TE SU).
i9 Initial Investent P$ of future cas- flo3s discounted I##
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
So5 t-e fi6ed cost #s. '5 &&5&&&
iv9 $aria/le !ost #s. &=>P$ #atio ?& ;
So5 Sellin4 Price &=(&; %&&
Annual cas- flo3
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
3ould /e deer4ed and dis1osed of for #s. %5 &&5&&&.(. T-e !o1anyZs cost of ca1ital is ' ;
)a0e a re1ort to t-e oard of t-e !o1any advisin4 t-e a/out t-e financialfeasi/ility of t-is acRuisition.
Net Present $alues for ' ; for #e. ' are as follo3s@+ears@ ' % ( <
P$@ &.K% &.?( &.' &. !alculation of /enefit fro t-eacRuisition>
a9 !as-
8/14/2019 sfm final paper-Nov 13.pdf
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Sanjay Saraf Educational institute Pvt. Ltd.
Sanjay Saraf Educational Institute Pvt. Ltd.
is '.< and sells UT I TIN" I ETTE# OLD
A!" )+ P#AISE TILL TE TI)E TE+ !O)E IT !O##E!T SOLUTION AS I
A$E DONE E#E.
E6istin4 eta of #aZs Lon4 Q s-ort 1osition 8'&&&&G %% G '.< Q (.
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