Financial Management Questions

Question:$01$

Mis Minhan Brothers Ltd$.$ is financed through Debt and Equity instruments. The Company has issued $16\%$ Bonds with a maturity period of $5$ years. The Bond is currently traded @ Rs$.950/-$ The total worth of Bands is Rs: $60$ million. The company has also issued common stock which is currently traded in the market Rs$.48$ per share. The Risk$-$Free zute is positioned at $5\%,$ the Beta of the company is calculated as $1\mathrm{.}24$ and the current market return is calculated to be $12\%.$ The total No$.$ of shares issued are $1\mathrm{.}5$ Million. Based on this data, calculate the Weighted Average Cost of Capital of Mis Minhas Lul, where the corporate tax rate is $35\%.$

Question:$02$

Explain the Net Operating Income Approach of Capital Structure with assumptions. Calculate the Value $3.$ of the Firm under this approach when: EBIT is Rs$.30,000,$ Total Capital is Rs$.200,000,$ cost of debt is $10\%$ and cost of capital is $12\%$

Question:$03$

Explain the Concept of Operating Leverage Calculate the Degree of Operating Leverage when The Sales are increased from $200$ Million so $240$ Million, the Variable Cost increased with the same ratio and the Fixed Cost is $80$ Million

Question:$04$

With the below data find de Cost of Equity for Mis Zeta Ltd$.$ The risk$-$free rate is considered to be $7\%$ and the Market Premium is $20\mathrm{.}786\%$

S&P $500$

$0\mathrm{.}00009$

$0\mathrm{.}00028$

$0\mathrm{.}01527$

$0\mathrm{.}01819$

$0\mathrm{.}00546$

$0\mathrm{.}02589$

$0\mathrm{.}03141$

$0\mathrm{.}01581$

ZETA Ltd

$0\mathrm{.}00491$

$0\mathrm{.}01975$

$0\mathrm{.}00242$

$0\mathrm{.}00242$

$0\mathrm{.}00726$

$0\mathrm{.}00721$

$0\mathrm{.}00242$

$0\mathrm{.}00485$