RISK AND RETURN: AN OVERVIEW OF CAPITAL MARKET THEORY
What is a return? Explain the components of (total) return? Should unrealised
capital gain (or loss) be included in the calculations of returns?
Return can be defined as exces
Ch. 20: Long-term Finance
LONG-TERM FINANCE: SHARES, DEBENTURES AND TERM LOANS
A. Funds needed (Rs)
B. Existing shares
C. Current market price (Rs)
D. Subscription price (Rs)
E. Ex-right price (Rs)
[(B C + i x D)/(B + i)]
(i) New shar
12/2/2014 Quantitative Methods in Education Research
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Beginning Research | Action Research | Case Study | Interviews | Observation Technigues
| Education Research in the Postmodern
Evaluation Research in Educati
By David Harper
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LONG TERM FINANCE: SHARES, DEBENTURES AND TERM LOANS
What is an ordinary share? How does it differ from a preference share and
debenture? Explain its most important features.
Ordinary shares (called common stocks in USA) are important s
What are the essentials of Walters dividend model? Explain its shortcomings.
Prof. J E Walter argues that the choice of dividend policies almost always affects
the value of the firm. Walters model is based on the followi
CAPITAL STRUCTURE THEORY AND POLICY
Explain the assumptions and implications of the NI approach and the NOI approach. Illustrate
your answer with hypothetical examples.
Under the Net Income (NI) approach, the cost of debt and cost of eq
VALUATION AND FINANCING
What is an asset beta? How is it calculated? Assume no taxes.
We know that a portfolio consists of individual securities. Each security has its
beta, and the beta of the portfolio is the weighted average beta of
Explain the three principal motives for holding cash.
Cash is required to meet a firms transactions and precautionary needs. A firm
needs cash to make payments for acquisition of resources and services for the
PRINCIPLES OF WORKING CAPITAL MANAGEMENT
Explain the concept of working capital. Are gross and net concepts of working
capital exclusive? Discuss.
Working capital signifies money required for day-to-day operations of an
RECEIVABLES MANAGEMENT AND FACTORING
Explain the objective of credit policy? What is an optimum credit policy?
The objective of credit policy is to promote sales up to that point where profit is
maximized. To achieve this basic
FINANCIAL STATEMENTS AND
CASH FLOW ANALYSIS
Explain the concept of working capital flow. Give examples of transactions that affect working capital,
and that do not affect working capital.
The working capital flow means increase or decre
CONVERTIBLE DEBENTURES AND WARRANTS
Define the following terms: (a) conversion price, (b) conversion value, and (c)
A convertible debenture is a debenture that can be changed into a specified
number of ordinary share
ASSET BASED FINANCING: LEASE, HIRE PURCHASE AND PROJECT
Define a lease. How does it differ from a hire purchase and instalment sale? What
are the cash flow consequences of a lease? Illustrate.
A lease is an agreement for the u
VENTURE CAPITAL FINANCING
Define venture capital. Explain its characteristics.
Venture capital is risk financing available in the form of equity or quasi-equity. It
is often thought of as the early stage financing of new and young enter
FINANCIAL STATEMENTS ANALYSIS
Explain the need for financial analysis. How does the use of ratios help in financial analysis?
Financial analysis is the process of identifying the financial strength and weaknesses of the firm
RISK AND RETURN: PORTFOLIO THEORY
AND ASSETS PRICING MODELS
Illustrate the computation of the expected rate of return of an asset.
The expected rate of return of individual assets can be calculated using the
E (R x ) =
Ch. 12: Risk Analysis in Capital Budgeting
RISK ANALYSIS IN CAPTAL BUDGETING
(i) Project A
(ii) Project A
(iii) Project A
(iv) Project A
Ch. 3: Valuation of Bonds and Shares
VALUATION OF BONDS AND SHARES
(1) 1-year government bond maturity value (Rs)
Market rate of interest
PV of the bond: 1,000/1.08 (Rs)
(2) Purchase price of bond (Rs)
Implied return: (1,000 904.98)/90
Ch. 4: Risk and Return
RISK AND RETURM:
AN OVERVIEW OF CAPITAL MARKET THEORY
Purchase price of L&Ts share, Rs
Number of shares purchased 1 Jan. 2004
Share price on sale after one year 31 Dec. 2004, Rs
Total dividend received, Rs
INTERNATIONAL FINANCIAL MANAGEMENT
How does financial management of an international firm differ from that of a
International or multinational firms operate in more than one country and their
Ch. 1: Nature of Financial Management
NATURE OF FINANCIAL MANAGEMENT
Case 1.1: The Anandnagar Electricity Company
The objective of this case is to initiate a discussion on the financial objectives of a private sector company. A private
FINANCIAL MANAGEMENT IN GOVERNMENT COMPANIES
What is the nature and scope of finance function in government companies? What are
the special features of financial functions in government companies?
Finance objectives constitute the core
FORMAT FOR PREPARING CASH FLOW STATEMENT - start with PBT
(A) CASH FLOW FROM OPERATING ACTIVITIES (Data: Income statement, CA and CL)
Adjustments before working capital changes
Working Capital Changes
Net cash generated from/used in operating activities (