Taurus Round - I

10 Questions | By Jogimaddi | Last updated: Mar 21, 2022 | Total Attempts: 110

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This quiz is conducted by the Chrizellenz 2010 (Management fest of Christ University-Kengeri Campus. ) Number of questions: 10 Time limit: 50 minutes. See carefully the Tie breakers 1st Tie breaker is Question no 3 2nd Tie breaker is Question no 4 3rd Tie breaker is Question no 1

Questions and Answers

1.

* 3rd Tie breaker1) Calculate Works Cost and Cost of Production Particulars Rs Sales 200000 Cost of Material 40,000 Direct Wages 60,000 Drawing office salary 25,000 Counting house salary 5,000 General expenses 10,000 Selling expenses 15,000 Management and staff salary 30,000
- A.
  
  Works cost is 1,00,000 & Cost of Production is 1,70,000
- B.
  
  Works cost is 1,25,000 & Cost of Production is 1,70,000
- C.
  
  Works cost is 1,00,000 & Cost of Production is 1,85,000
- D.
  
  Works cost is 1,25,000 & Cost of Production is 1,85,000
2.

2) From the data given below, calculate forward premium or discount, as it is applicable in the case: (4 Min) INR per British Pound is given below Spot Rate = INR 78.0001 – INR 78.99256 months forward rate = INR 78.8925 – INR 78.9925 Premium with respect to Bid Price : Premium with respect to Ask Price is
- A.
  
  1.96% per annum 2.29% per annum
- B.
  
  2.29% per annum 1.96% per annum
- C.
  
  0.196% per annum 0.229% per annum
- D.
  
  None of the above
3.

*** 1st Tie breaker 3) On October 19, 2010, you bought 10 call contracts for Microsoft, with strike price of Rs30, expiring in January, 2011, at Rs0.35 per share, paying a typical commission of Rs9.95 per trade plus Rs0.75 per contract. Microsoft rises to Rs33 by December, so you decide to sell your calls to lock in your profits, with the calls trading at Rs3.20 per share, with Rs.20 being the remaining time value. Calculate the Net profit. One Contract size is 100. (10 Min) [Call Value at Expiration = Stock Price – Strike Price Net Profit of Exercised Call = Stock Price – Strike Price – Premium - Buy Commission - Exercise Commission Net Profit of Sold Call = Sell Premium – Buy Premium - Buy and Sell Commissions]
- A.
  
  Rs 6372.2
- B.
  
  Rs 3827.1
- C.
  
  Rs 2815.1
- D.
  
  None of the above
4.

**2nd Tie breaker 4. The P/V ratio of xyz co., is 40%, margin of safety is 30% and Sales is Rs. 3,00,000/-. Calculate i)) BEP ii) Profit if Sales are Rs.2,50,000/- iii) Fixed Cost (10 Min)
- A.
  
  Sales 2,10,000 Profit 40,000 Fixed cost 84,000
- B.
  
  Sales 2,10,000 Profit 24,000 Fixed cost 1,26,000
- C.
  
  Sales 2,30,000 Profit 30,000 Fixed cost 92,000
- D.
  
  Sales 2,10,000 Profit 16,000 Fixed cost 84,000
5.

The questions 5^th, 6^th & 9^th are based on the given below data. You are being given the capital structure of company which consists of the following Particulars Rs Lakhs Equity Share of Rs 100 each 20 Retained Earnings 10 9% Preference Share 12 8% Debentures 8 Total 50 The company earns 12% on its capital. The income-tax rate is 50%. The company requires a sum of Rs 25 lakh to purchase a new machinery for which the following alternative are available Issue of 20,000 equity share for a premium of Rs 25 Issue of 10% Preference shares Issue of 8% Debentures It is estimated that P/E ratio for Equity Shares, Preference Shares & Debentures would be 21.4, 17 & 15.7 respectively. 5) Which of these following recommendations would you recommend if both Market Price Per share & EPS are considered.
- A.
  
  Equity financing
- B.
  
  Preference financing
- C.
  
  Debenture financing
- D.
  
  I or III of the above
6.

6) In the above question(i.e., 5th question) Which of these following recommendations would you recommend if If ONLY Market price per share is considered
- A.
  
  Equity financing
- B.
  
  Preference financing
- C.
  
  Debenture financing
- D.
  
  I or III of the above
7.

The questions 7^th , 8^th & 10^th are based on the below data. The XYZ Ltd wants to acquire ABC Ltd by exchanging its 1.6 shares for every share of ABC Ltd. It anticipates to maintain the existing P/E ratio subsequent to the merger also. The relevant financial data are furnished below. (5 min) Particulars XYZ Ltd ABC Ltd EAT (Rs) 15,00,000 4,50,000 Number of equity shares outstanding 3,00,000 75,000 Market Price per share (MPS) 35 40 7) What was the P/E ratio used in acquiring ABC Ltd?
- A.
  
  4.56
- B.
  
  9.33
- C.
  
  11.2
8.

8) In the above question(i.e., 7th question) What is EPS of XYZ Company after the acquistion?
- A.
  
  7.65
- B.
  
  6.67
- C.
  
  4.64
9.

9) The Debenture given in Question no 5 is to be paid after a period of 10 years at a premium of 5%. The face value of the Debenture is Rs. 1,000. Interest is paid after 10 years after every six months. What is the current worth of the debentures of similar risk and maturity is equal to the debenture’s coupon rate that is 8%. (5 Min) Present value of Interest Factor of Annuity (PVIFA) of 1Re 4% 8% 10 year 8.1109 6.7101 20 year 13.5903 9.8181 Present value of Interest Factor (PVIF) of 1Re 4% 8% 10 year 0.7307 0.4632 20 year 0.4564 0.2145
- A.
  
  14287
- B.
  
  1022.4
- C.
  
  12487
- D.
  
  None of the above
10.

10) In the Question no 7 given above What is the expected market price per share of the merged company?
- A.
  
  65.31
- B.
  
  32.48
- C.
  
  None of the above