December 2015 - Paper 3

26:  
Determine the market price o f a share using Gordon's model of Dividend, if total investment in asset is Rs10,00,000 number of shares is 50,000 with a total earning of Rs 2,00,000. The cost of capital is 16% and payout ra tio is 40%.
A.

Rs 45

B.

Rs 54

C.

Rs 40

D.

Rs 38

 
 

Option: C

Explanation :

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27:  
A company w ishes to raise Rs 30,00,000 through a right offering. It has 2,40,000 shares outstanding, which have been most recently tradin g between Rs 106 and Rs 116 per share. On the advice of the SBI caps, the company has set the subscription p rice for the rights at Rs 100 per share. What will be the theoretical value of a right if the current market price is Rs 109 with rights and the subscription price is Rs 100 ?
A.

Rs 1.125

B.

Rs 1.375

C.

Rs 1.000

D.

Rs 1.750

 
 

Option: C

Explanation :

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28:  

The public sale of common stock in a subsidiary in which the parent company usually retains majority control is called :

A.

A pure play

B.

A spin· off

C.

A partial sell - off

D.

An equity carve - out

 
 

Option: D

Explanation :

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29:  

The ________ is especially well suited to offer hedging protection against transaction risk exposure.

A.

Forward Market

B.

Spot Market

C.

Transactions Market

D.

Inflation Rate Market

 
 

Option: A

Explanation :

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30:  
Match the following:
 
List - I                                                                                 List - II
(Items/ Methods)                                                              (Used/ Application)
 
(a) Purchase Consideration                                       (i) Marketing
 
(b) Written Down Value Method                                 (ii) Store Recording
 
(e) LIFO method                                                         (iii) Depreciation
 
(d) Rate of Return Method                                         (iv) Capital Budgeting
 
                                                                                   (v) Merger
A.

(iv) (iii) (v) (i)

B.

(i) (iii) (iv) (v)

C.

(i) (v) (ii) (iii)

D.

(v) (iii) (ii) (iv)

 
 

Option: D

Explanation :

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