Financial Modelling NMIMS Assignment answers available 2023

Financial Modelling NMIMS Assignment answers available

1. What are the phases of building an Unlevered DCF Model? Calculate the value of
   Equity using the DCF method with the following information/assumptions:
   Tax Rate 25%
   Discount Rate 12%
   Shares Outstanding 25000

Cash Flows for the next few years is as under:

(Rs. In ‘000s)
1 2 3 4 5
EBIT 120 115 135 145 120
Changes in NWC 20 25 12 18 23

Terminal value in 6th year is Rs. 500,000.
Capex of Rs. 45,000 is estimated every year.
Cash Balance of Rs. 10,000 and Debt of Rs. 200,000 exists as on date. (10 Marks)

2. Mr. Mohan had a kitty of Rs. 45,00,000 for surplus investments. His aims for
   investment were as under:
   (a) 10% of the amount has to be maintained as liquid funds for emergencies.
   (b) 40% of the amount in order to earn a steady income. He does not have too much of
   an expertise in the markets and hence lacks investment acumen.
   (c) Balance 50% he is open to take risks and wants to earn higher than the FD interest
   rate currently offered by the banks/Government.
   Advise Mr. Mohan on an investment methodology to take care of the above objectives
   and to build its portfolio. (10 Marks)
3. a. M/s Esha Enterprises was trading at a share price of Rs. 50 at the beginning of the
   year. During the year the company declared a Dividend of Rs. 5. By the end of the year
   the share price was at Rs. 55 per share. Beta of the Company was pegged at 0.6.
   Government securities are earning a return of 4% currently. Calculate the Cost of
   Equity of M/s Esha Enterprises using CAPM Method. (5 Marks)
   b. If you deposit an amount of Rs. 25000 in a bank at an interest rate of 8% for 5 years,
   compounded annually, how much will it grow after 5 years? What if the rate is
   10%? And compounded quarterly at 8% p.a. (5 Marks)

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