Advanced Financial Management - May 2025

1. (a) Following details are available for PQR Ltd. : 6 Current Dividend =7%3.50 Cost of Equity = 12.50% Growth Rate =2% You required to — (i) Calculate Price of Share of PQR Ltd. (ii) Is PQR Ltd.’s Share over-valued if the Share Price = = 45, ROE = 8% and EPS = 2.75? Show your calculations using both the P/E Multiple Approach and Earnings Growth Model. (b) With the help of the following information of PND Ltd., compute the…

(a) BC Ltd. is contemplating on buying a new machine at € 70,00,000 with 6 an additional working capital requirement of % 10,00,000. The machine is expected to have an economic useful life of 5 years, with no salvage value. The company follows the straight line method of depreciation and same is accepted for tax purposes. The machine is expected to generate an incremental increase in the before tax cash operating income of % 25,00,000 (in real terms) per year…

1* April, an open-ended scheme of Progressive Mutual Fund had 800 7 Lakh units outstanding with Net Asset Value (NAV) of & 44.30 per unit. At the end of April, it issued 16 Lakh units at opening NAV plus 2% load, adjusted for dividend equalization. At the end of May, 8 Lakh units were repurchased at opening NAV less 2% exit load adjusted for dividend equalization. At the end of June, 60% of its available income was distributed as dividend.…

Beta: 1.5 (based on the industry benchmark), * Capital Structure: Debt-to-Equity Ratio of 30:70 * _ Risk-Free Rate: 6% (based on liquid bonds). + Market Rate of Retum: 12% (internal industry assessment). ° Equity Value (EV): The EV is to be taken at a multiple of 8 on EBITDA. * The pre-tax cost of debt is 12.45% and assume a tax regime of 30% The Future Cash Flows (FCFs) for the next three years are as follows Year 1 Year…