Finance Answers

Alpha Ltd is expecting annual earnings before interest and tax of ₹ 1.5 Lakhs. The company has 10% debentures of ₹ 4 lakhs and cost of Equity capital is 12%. Calculate the total value of the firm and the overall cost of capital of the firm according to Net Income Approach. Also comment what will happen to the value of the firm and the overall cost of capital if debt is increased in the capital structure.

6. Duration is a widely used measure of a portfolio’s exposure to yield curve movements. You have a 9 percent, $1000.00 bond with 4 years to maturity paid interest semi-annually. Its YTM is 10 percent. Calculate the market value of the bond.

What is the effective interest rate faced by a person who owes a loan to the loan shark with monthly payments at a 36% annual interest rate?

I. A family buys a house worth $326,000. They pay $75,000 deposit and take a mortgage for the balance at J12=9% p.a. to be amortized over 30 years with monthly payments.
II. Fill out the loan amortization schedule provided in the solution template for the first 5 loan payments. What do you notice about the composition of the payment amount?

1. A $4,000 , 12% bond will be redeemed on
May 1,2008. Interest is payable semiannually
on May 1 and November 1.
Find the purchase price of the bond if the date of purchase is May 1, 1998 and
the yield rate is 10% compounded semi-annually.

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market, that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts?
a. Demand increases and supply decreases
b. Demand increases and supply is constant

Working capital is considered as excess of Current assets over current liabilities but companies
like HUL, Godrej, Bharti airtel, Hero Motorcorp, faces negative working capital in their operating life.
Thus their current liabilities exceed their current assets in some years.
What is your belief in this regard, can working capital ever be negative or Zero for any company? If
yes than what shall be the repercussions if a company has (a) dearth of Working Capital and (b)
overload of Working Capital?

Q. List down briefly the various inventory management techniques prevalent in the industry.
Discuss how some of these techniques would be applicable to a Medical Store in effective
management of their inventories, i.e medical supplies.

● Assessment​ :
Tax, control, and protect: which is more important?
Government seeks to regulate finance firms in order to collect tax revenues or to better control businesses and the economy or to protect consumers. Which of these objectives do you think is the most important and most likely to guide government policy decisions? and why