Question

1. XYZ Ltd has a capital structure consisting of INR 50 million of 10% participating preference shares and INR 150 million of equity shares. The profit after tax of the company for the year ended March 31, 2021 is INR 45 million. The preferences shareholders are entitled to participate in the surplus after payment of preference dividend at the fixed rate on prorate basis with equity shareholders. Assuming that the company decides to distribute the entire amount of profits after tax, the total amount out of profit after tax that would be allocated to preference shareholders works out to (in million INR):
a. 15
b. 12
c. 5
d. 7

2. A European call option is the right to buy an asset at the predetermined price (called exercise price) on the exercise date (called the maturity date). You by a European call on the stock of XYZ Ltd with an exercise price of INR 115 exercisable 3 months from now. The price you pay for buying the call is INR 10. If the stock price on maturity of the option turns out to be INR 95, the profit/loss (in INR) you make on this investment strategy is:
a. (-)20
b. (-)10
c. (+)5
d. (-)30

3. XYZ Ltd is going into liquidation. The realizable value of its assets (net of current liabilities) works out to INR 100 million. It has a long term debt outstanding of INR 110 million and fully paid preference capital of INR 15 million. Its equity capital consists of 10 million equity shares of nominal (face) value INR 10 each fully paid up. The amount that would be recoverable by the long term lenders against their claim of INR 110 million on the completion of liquidation and distribution of resources would be (in million INR):
a. 100
b. 60
c. 110
d. 50

4. The capital of XYZ Ltd consists of 1 million equity shares of INR 10 each but no preference shares or debt. Its EPS for the year ended March 31, 2021 was INR 7 per share. The company has taken a 10% long term debt of INR 5 million on April 1, 2021. It expects its EBIT (Earnings before interest & taxes)to increase by 25% for the year ended March 31, 2022. The tax rate is expected to remain at 30%. The projected EPS for the year ended March 31, 2022 (in INR) is:
a. 8.40
b. 5.00
c. 7.20
d. 10.25

5. XYZ Ltd is going into liquidation. The realizable value of its existing assets (net of current liabilities) works out to INR 100 million. It has a long term debt outstanding of INR110 million. Its equity capital consists of 10 million equity shares of nominal (face) value INR 10 each with INR 5 paid up on each share. The amount that would be recoverable by the long term lenders against their claim of INR 110 million on the completion of liquidation and distribution of resources would be (in million INR):
a. 100
b. 60
c. 110
d. 50

Answer 1

Answer:

ghhghlc to the song BurjKhalifa

Answer 2

Answer:

1st 15, 2nd -10 ,3rd 50,4th 8.40,5th 110