Attempt all the questions.
Section-A
Question1) Describe the organization and functions of OCTEI.
Question2) Explain different risks being faced under portfolio management and suggest methods to eliminate them.
Question3) A company purchased an equipment costing Rs. 5,00,000 on hire purchase basis payable in 4 equal yearly instalments of Rs. 2,05,000 each. Split the instalments into interests and principal.
Question4) Describe mergers and acquisitions. What are the motives and economic advantages of merger and acquisitions?
Section-B
Case Study
The following is the data regarding two companies ‘A’ and ‘B’ belonging to the same equivalent risk class:
Company A Company B
Number of Ordinary shares 1,00,000 1,50,000
8% Debentures 50,000 ----
Market price per share Rs.1.30 Rs.1.00
All profit after paying debenture interest is distributed as dividends.
Case Question:
Question5) You are required to describe how under Modigliani and Miller approach, an investor holding 10% of shares in company ‘A’ would be better off in switching his holding to company ‘B’.