Unique Paper Code : 61017928

Name of the Paper : Business Analysis and Valuation

Name of the Course : Bachelor of Management Studies (CBCS)

Semester : V

Duration : 3 hours

Maximum Marks : 75 Marks

Instructions for Candidates

1. This is an Open Book Examination.

2. Attempt any four out of six questions.
3. All questions carry equal marks.
Q1. On the basis of following information about Nestle India Ltd for period from financial
year 2013-1to 20107, you are required to:

(a) Analyse the company’s financial results using any 3 key ratios each on the basis of
profitability and solvency.

(b) Comment on the overall financial health of the company using Du Pont Analysis and
explain the findings.

(c) “Annual Reports meet not only compliance requirements but also serve as an important
tool for qualitative analysis.” In the light of this statement, explain how Annual Report
contributes in financial analysis and valuation of a company.

Nestle - Balance
Sheet
Year Dec 17 Dec 16 Dec 15 Dec 14 Dec 13

SOURCES OF
FUNDS:
Share Capital 96.42 96.42 96.42 96.42 96.42
Reserves Total 3,324.17 3,185.91 2,721.42 2,740.79 2,272.33
Equity Share 0 0 0 0 0
Warrants
Equity Application 0 0 0 0 0
Money
Total 3,420.59 3,282.33 2,817.84 2,837.21 2,368.75
Shareholders’
Funds

Secured Loans 0 0 0.9 4.11 0.01

Unsecured Loans 35.14 33.15 16.83 15.46 1,189.48
Total Debt 35.14 33.15 17.73 19.57 1,189.49

Deferred Tax 275.46 293.29 288.96 327.1 307.22

Liability
Other Liabilities 2,292.19 1,972.89 1,597.17 1,388.66 1,193.39
Current Liabilities 1,405.25 1,312.95 1,215.34 1,138.28 1,133.29
Acceptances 0.00 0.00 0.00 0.00 0.00
Other Liabilities 0.00 0.00 0.00 0.00 0.00
Provisions 87.46 53.8 265.32 213.06 213.88
Total Current 1,492.71 1,366.75 1,480.66 1,351.34 1,347.17
Liabilities
Total Liabilities 5,747.92 5,288.37 4,432.74 4,245.44 4,751.63

APPLICATION
OF FUNDS:
Gross Block 3,358.43 3,095.12 5,117.36 5,008.98 4,903.16
Less: Accumulated 742.25 364.98 2,219.51 1,832.34 1,533.85
Depreciation
Less: Impairment 0 0 0 0 0
of Assets
Net Block 2,616.18 2,730.14 2,897.85 3,176.64 3,369.31
Lease Adjustment 0 0 0 0 0
Capital Work in 94.16 188.17 230.79 244.78 294.71
Progress
Producing 0 0 0 0 0
Properties
Investments 1,978.87 1,755.66 1,324.92 811.82 851.08
Deferred Tax Assets 153.5 137.95 116.03 104.38 91.75

Current Assets,
Loans & Advances
Inventories 902.47 940.06 820.81 844.1 735.93
Sundry Debtors 88.97 97.93 78.42 99.1 84.27
Cash and Bank 1,457.42 880 499.55 445.82 749.36
Loans and Advances 94.94 83.46 103.56 67.29 105.2
Total Current Assets 2,543.80 2,001.45 1,502.34 1,456.31 1,674.76
Total Assets 5,747.92 5,288.37 4,432.74 4,245.44 4,751.63
Nestle - Consolidated
Profit and Loss
Year Dec 17 Dec-16 Dec-15 Dec 14 Dec-13

INCOME:
Sales Turnover 10,192.18 9,474.57 8,482.48 10,178.07 9,419.02
Excise Duty 182.58 333.23 307.17 323.23 317.97
Net Sales 10,009.60 9,141.34 8,175.31 9,854.84 9,101.05
Other Income 176.92 172.12 110.09 94.32 96.9
Stock Adjustments 79.56 7.66 -11.97 67.43 -105.32
Total Income 10,266.08 9,321.12 8,273.43 10,016.59 9,092.63
EXPENDITURE:
Raw Materials 3,696.99 3,227.26 3,456.94 4,591.39 3,313.68
Power & Fuel Cost 288.44 232.79 221.99 384.33 385.38
Employee Cost 1,017.45 901.57 912.75 837.05 741.5
Other Manufacturing 897.84 850.85 170.61 197.11 895.68
Expenses
Selling and Administration 1,823.98 1,751.78 1,636.02 1,688.99 1,528.64
Expenses
Miscellaneous Expenses 267.93 366.91 710.94 191.6 183.27
Less: Pre-operative 0 0 0 0 0
Expenses Capitalized
Total Expenditure 7,992.63 7,331.16 7,109.25 7,890.47 7,048.15

Operating Profit 2,273.45 1,989.96 1,164.18 2,126.12 2,044.48

Interest 91.9 90.91 3.29 14.23 36.51
Gross Profit 2,181.55 1,899.05 1,160.89 2,111.89 2,007.97
Depreciation 342.25 353.67 347.26 337.54 329.95
Profit Before Tax 1,839.30 1,545.38 813.63 1,774.35 1,678.02
Tax 649.17 561.19 289.89 582.41 507.5
Deferred Tax -35.06 -17.17 -39.53 7.25 53.39
 Reported Net Profit 1,225.19 1,001.36 563.27 1,184.69 1,117.13
Extraordinary Items 0 -6.87 -322.39 -0.19 9.19
Adjusted Net Profit 1,225.19 1,008.23 885.66 1,184.88 1,107.94
Adjst. below Net Profit -259.49 -170 0 0 0
P & L Balance brought 2,368.93 2,101.60 1,882.52 1,532.88 1,074.55
forward
Statutory Appropriations 0 0 0 0 0
Appropriations 829.18 564.03 563.25 835.05 658.8
P & L Balance carried 2,505.45 2,368.93 1,882.54 1,882.52 1,532.88
down
Dividend 0 0 467.62 607.42 467.62
Preference Dividend 0 0 0 0 0
Equity Dividend % 860 630 485 630 485
Dividend Per Share (Rs) 86 63 48.5 63 48.5
Earnings Per Share-Unit 127.07 103.85 48.5 111.55 107.62
Curr
Earnings Per Share (Adj)- 127.07 103.85 48.5 111.55 107.62
Unit
Book Value-Unit Curr 354.76 340.42 292.25 294.26 245.67
Book Value (Adj)-Unit 354.76 340.42 292.25 294.26 245.67
Curr
Weighted Avg Number of
Equity Shares Outstanding 46 49 50 50 50

Q2. FNK Corporation is expected to grow at a higher rate for years; thereafter the growth rate
will fall and stabilize at a lower level. Calculate the value of the firm using DCF valuation
method

Base Year Information (All figures are Million)

Revenue= 320, EBIT= 90, Capex= 100, Depreciation = 60, Working Capital= 20% of
Revenue and Tax Rate – 0 Percent
High Growth Stage (Length 3 years)

Growth in Revenues, Capex, EBIT & Depreciation = 40%, Working Capital= 20% of
Revenues, D/E Ratio= 1:1, Risk free rate= 12%, Market Risk Premium=7%. Equity Beta=
1.3, Kd (Pretax)= 15% and Tax rate will increase to 30% in linear increments of 6%

Inputs for the Transition Period (Length 3 years)

Growth in Rev/Dep/EBIT and Capex will decline from 40 % in year 5 to 10% in year 10 in
linear movements of 6 % each year, Working Capital= 20% of Revenues, D/E Ratio= 0.8 :1,
Risk free rate= 11%, Market Risk Premium=6%. Equity Beta= 1.1, Kd (Pretax)= 14% and
Tax Rate = 30%

Stable Growth Period

Terminal Growth in FCFF=10%, Risk free rate= 11%, Market Risk premium=5%, Equity
Beta=1, D/E Ratio= 0.5 :1, Kd (Pretax)= 13%, Corporate Tax Rate= 30%
.

Q3. Sundaram paints is a large privately held decorative paints company which has been in
existence for nearly three decades. Founded by Shankar Sundaram, it is presently managed
by Ravi Sundaram, the only son of the founder. Ravi Sundaram wants to expand the business
and take it global. For this, the firm needs access to evaluate its worth in the market. So, Ravi
has engaged the services of Integral Capital Services, a merchant banking firm. Amit Kumar,
the CEO of Integral Capital Services, has entrusted you with the task of doing a preliminary
valuation of Sundaram paints. You have asked your analyst to gather relevant financial
information on International paints Company, Elegant paints Limited, and Modern Paints
Corporation (the three largest listed companies in the decorative paints industry) as well as on
Sundaram paints. The following information is available.

Financial International Elegant Modern Sundaram

Information (in
millions)
Revenues 19600 15400 12400 10800
EBITDA 2840 2520 1675 1890
PAT 1588 1098 791 886
Shareholders’ 8750 7540 6260 4820
Funds
Loan Funds 5060 5150 4500 2880
Total Assets 13810 12690 10760 7700
Net Profit 8.1% 7.1% 6.2% 8.2%
Margin
 Debt Equity 57.8% 68.3% 71.9% 59.8%
Ratio
Paid up Equity 2400 2000 1800 1440
Share Capital
(FV – Rs 10
each)
Expected EPS 14% 12% 10.2% 15%
growth
Market Price per 96.8 68.4 43.2
Share
Beta 1.1 1.2 1.28

Assume that the market value of debt is the same as its book value.

(a) What is the Enterprise value/EBITDA of International, Elegant, and Modern Paints
Corporation?

(b) What factors do you think explain the differences in the valuation ratios of the three
firms?

(c) Considering equal weightage for all the three firms, and using EV/EBITDA, EV/Sales
and EV/ Book Value as base, find the value of Sundaram Paints.

Q4. In April 2020, Angel Ltd announced its plan to acquire Delta Co. for Rs 4.8 cr. At the
time of the acquisition, the relevant information about the two companies was as follows:

Angel Delta
Revenues Rs. 4800 Rs. 2400
Cost of goods sold (without depreciation) 57% 75%
Depreciation Rs. 168 Rs.100
Tax rate 35% 35%
Capital spending Rs. 300 Rs. 160
Working capital (as % of revenue) 40% 30%
Beta 1.45 1.25
Expected growth rate in revenues/EBIT 25% 15%
Expected period of high growth 10 years 10years
Growth rate after high growth period 6% 6%
Beta after high growth period 1.10 1.10

Capital spending will be 115% of depreciation after the high-growth period. Neither firm has
any debt outstanding. The Treasury bond rate is 7%. Risk Premium 5.5%
 (a) Estimate the value of the combined firm, with no synergy. As a result of the merger,
the combined firm is expected to grow 24% a year for the high growth period. Estimate
the value of the combined firm with the higher growth.

(b) What is the synergy worth? What is the maximum price Angel can pay for Delta Co.?

Q5. The Risk-free rate of return is 8%, the expected rate of return on the market portfolio is
15%, and stock of Xyrong Corporation has a beta coefficient of 1.2. Xyrong pays out 40% of
its earnings in dividends, and the latest earnings announced were Rs 10per share. Dividends
were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE
of 20% per year on all reinvested earnings forever.

(a)What is the intrinsic value of a share of Xyrong?

(b) If the market price of a share is currently Rs 100, and you expect the market price to be
equal to the intrinsic value 1 year from now, what is your expected 1 -year holding – period
return on Xyrong stock?

Q6. Write a short note on the following (Any Three)

(a) Liquidity and Turnover ratios.

(b) “The discounted cash flow valuation is preferred over relative valuation in theory. But
in practice, it’s the opposite.” Compare and contrast the suitability of the two
approaches.

(c) “Option to delay can make a difference in valuing the assets or firms.” State and
explain some examples in support of the same.

(d) P/E ratio.

 OBE: OPEN BOOK EXAMINATION_A
[This question paper contains XX printed pages.]
Your Roll No: …………………..

Sr. No. of Question paper : XXXX

Unique Paper Code : 61017931
Name of the Paper : Consumer Behaviour(CBCS)
Name of the Course : Bachelor of Management Studies (BMS)
Semester : V
Duration : 3 Hours
Maximum Marks : 75

Instructions for candidates:

1. This paper contains 6 questions. Attempt ANY FOUR questions.

2. All questions carry equal marks.

Ques 1) Ayurveda is a traditional Indian system of medicine. It aims to preserve health

and wellness by keeping the mind, body, and spirit in balance and preventing disease
rather than treating it. To do so, it employs a holistic approach that combines diet,
exercise, and lifestyle changes. Ayurvedic herbs and spices are also an important
component of this approach. They are thought to protect your body from disease and
offer a variety of health benefits, including improved digestion and mental health.
Ayurvedic herbs and spices have been known to have science-backed health benefits.
Shree BaidyanathAyurvedBhawan Ltd was formed in 1917. And, since then
Baidyanath is serving excellent quality Ayurvedic products in the marketplace which
are highly reliable. Consequently, they are very popular for preparing the finest
remedial formulations made from herbs and that could help to boost better nutrients
for a healthy body.
Baidyanath Group sees these times of the pandemic as ideal to boost its sales of an
immunity boosting package- Sanjeevani consisting of tablets/pills, syrup (to be had
with warm water) and herbal tea. The package is priced at Rs.2500 for a one-month
dose for an adult.
How would the understanding of consumer motivation and consumer attitudes assist
the marketing team of Baidyanath in designing the marketing strategy for Sanjeevani?

Ques 2) Consider purchase of the following a formal shirt and property. How would
need recognition, pre-purchase search and decision making rules differ for the two?
What marketing implications do these hold for the marketers of these two products?
Explain.

Ques 3) Nykaa is an Indian retail seller of beauty, wellness, and fashion products.
FalguniNayar, a former managing director at Kotak Mahindra Capital Company,
founded Nykaa in 2012. It was launched as an ecommerce portal curating a range of
beauty and wellness products. The brand name Nykaa is derived from
 the Sanskrit word nayaka, meaning ‘one in the spotlight’. In addition to its primary
ecommerce business, it has an offline presence via 68 brick-and-mortar stores across
the country. It claims to have over 3 lakh products across 1,500 brands. In 2015,
Nykaa launched its collection of in-house beauty products. In March 2016, it
introduced private labeled products in the bath and body care category. In October
2019, it partnered with Bollywood actress Katrina Kaif to launch the brand Kay
Beauty.
Nykaa is seen primarily seen as a retailer of women beauty, wellness and fashion
products. The Multi-brand ecommerce fashion portal Nykaa Fashion, has launched its
Men’s Fashion category on its website and app. This follows the launch of the Nykaa
Man website and app in 2018 - an experience dedicated to men’s grooming. However,
the men store has not been able to penetrate the market.
Do you think branding of the men store division as Nykaa Man was the right
decision? What challenges do you think Nykaa is facing in its foray into the men
grooming and fashion product business? Base your answer on the understanding of
consumer learning, consumer perception and consumer personality.

Ques 4) A consumer research reveals that fashion trends, styles and colors suggest that
clothes are one of the most influenced purchases of a customer. Since early childhood
social approval is important for “what I wear”. While people are self-conscious of
what they wear in public, they are less fussed with clothes worn at home. Consumers
also often think that there is not much difference between quality and comfort of
expensive brands and the lesser known/unknown brands. Real difference lies in how
these brands are perceived. Many people feel that wearing expensive clothes make
others feel good just looking at the person wearing them.
Apply your knowledge of consumer behaviour to explain the above. What marketing
implication can you draw based on your understanding?

Quest 5) Neutrogena, a company known for its “dermatologist recommended” skin care
products, is introducing a line of premium luxury grooming products for men –
cleansers, moisturisers, face wash, toners, anti-ageing creams, face and body scrubs
among others. Identify the VALS segment that will be most appropriate to target. An
expert has recommended Neutrogena executives to be aware of the impact of social
class, culture, sub-culture, cross culture influences and self-images. Explain the
advice given by the expert.

Quest 6) With the Covid 19 pandemic the world is gearing up to new standards of
hygiene. The markets are flooded with brands of sanitizers, masks, face shields,
gloves etc, some known and others lesser known. Individual consumers and
companies are buying these products to ensure their own and employee safety.
How does the consumer behaviour differ from the industrial buying behaviour? Does
this cause a difference in the marketing strategy to be adopted while selling to
consumers and industrial buyers? How does this difference impact the marketing
strategy to used?
UPC: 61017937

Course: Bachelor of Management Studies (CBCS)

Paper: International Marketing

Semester: 5

Maximum Marks: 75

Instructions for candidates:

Answer any 4 questions.
All questions carry equal marks.

1. Elaborate upon some of the reasons for International expansion. Support your answer with suitable
examples.

2. How do the demand and purchase patterns differ in developing and developed markets? Discuss how
these impact marketing strategies of companies selling in developing markets and developed markets?
Comment upon the relevance of small unit packs in developing/ rural markets? Support your answer
with suitable examples.

3. “The operating environment is a challenge for any business, more so if that company is entering a new
market.” Taking the example of a social media MNC operating in India, discuss the impact of various
factors under the PESTEL tool on its business in India.

4. “International expansion needs to be supported by the right business model.” Elaborate upon the AAA
framework and the relative merits and demerits of each of the A’s. Discuss their usefulness in the context
of a car manufacturer setting up manufacturing facilities internationally. Support yourself with relevant
examples.

5. “Joint ventures are an established and well liked method of international expansion.” In light of this
statement, describe what JV's are. Comment upon the pros and cons of this method for international
expansion. Support your entire answer with sufficient examples.

6. “Pricing in international markets is more difficult that in the domestic market.” In light of this statement,
discuss the various factors that can impact a pricing decision from an international perspective. Which
strategy would you recommend for a company wishing to sell mobile phones in India? Support your
answer with examples.
 Set-A

Unique Paper Code: 61017926

Name of paper-Investment Analysis and Portfolio Management
Name of the Course: Bachelor of Management Studies (BMS)
Semester :V
Duration 3 hours
Exam: OBE mode December 2020
Maximum Marks: 75
Instructions for candidates
Attempt any four questions and answer all parts of each question together.
All questions carry equal marks
Any assumptions made by you when attempting a question must be clearly stated.

Q1. A 5 year 10 % coupon bond with a face value of Rs. 1000 will be redeemed at 10% premium on
maturity. At present the the bond is available for Rs 900. It is callable after 3 years at Rs 1150.
Estimate the price,yield to maturity, yield to call, and current yield of the bond and explain their utility
for the different investors having different investment horizons?. What are the systematic and
unsystematic risk factors that an investor should take into account while investing in this bond
especially in developing countries?

Q2. A company paid dividend of Rs 8 per share in the immediately preceding period. Dividend is
expected to grow at 5% for one year, then at 15% rate for the next two years, after which it is expected
to grow at a 8% rate for ever. What is the fair price of the share if the required return is 14%?.
What type of mutual funds will you recommend while formulating the portfolio of investors looking
for income and and investors looking for growth ? How will you rate the performance of three mutual
funds on the basis of Treynor Ratio and Sharpe Ratio with the given information: Return of MF-
X=12% with Standard Deviation of 8% and Beta of 0.8; Return of MF-Y=14% with Standard
Deviation of 10% and beta value of 1.2; Return of MF-Z =16% with Standard Deviation of 12% and
beta of 1.6. The Return of NIFTY-50 (market index) is 20% with Standard Deviation of 14%. The
Return on T-Bills is 6%.

Q3. Explain the three forms of Market Efficiency. Also, enumerate the tests that can be done to test
weak and semi strong efficiency of stock markets.
The return and beta of two stocks that lie on the security market line are as follows. ABC has return of
17% and beta 1.2 and XYZ has return 19% and beta 1.4. What is the required return on PQR with beta
of 0.8?

Q4. Explain and differentiate between the Markowitz Model and Single Index models. Calculate the
expected return and risk (standard deviation) of VI (Vodafone Idea) Ltd. and the Sensex from following
information. Also calculate covariance, correlation and beta.

Probability Return on Sensex Return on VI Ltd.

0.1 10 8
0.4 9 10
0.4 15 19
0.1 20 25

Q5. Your client wants a fixed sum of Rs 50 lakhs at the end of 4 years. Market yields at present are
9%. You advise use the concept of immunization with duration and shortlisted the following two
bonds for this purpose.
1. A zero coupon bond of Rs 10,000 face value that has a term to maturity of seven years
2. A three year bond offering 9 percent coupon per annum with Rs 1000 face value
The client wants to know the following before making the investment : What are the assumptions of
immunization using duration? You are recommending a portfolio of bonds, what are the risks of
investing only in the 3 year bond and only in the seven year bond? How much total money does he
need to invest today? What is the price of the zero coupon bond and the three year bond today?
What is the duration of each of the bonds? How many bonds of each does he need to buy to be
immunized ? (assume they can be bought in fractions also) The client has heard about modified
duration and that it can be used to estimate price changes. Please calculate the modified duration of the
zero coupon bond and the percentage change in the price of the zero coupon bond, if the yield declines
by 0.25 percentage points (25 basis points)
Also clarify whether duration of the zero coupon bond and the three year bond will increase or decrease
if yield declines by 25 basis points

Q6. An investor who normally invests in fixed income instruments wants you to analyse whether it is
worth investing in debentures of XYZ Ltd . The company should have interest coverage ratio of at
least 4, debt coverage ratio of at least 2, and Long term debt to equity ratio of below 1.
The investor also heard there was a concept called Company Analysis and expects you to do so from
the profit and loss statement and balance sheet of XYZ Ltd provided. However you need to explain if
this information is sufficient or not and what else is required .
 OBE: OPEN BOOK EXAMINATION_A
[This question paper contains XX printed pages.]

Your Roll No: …………………..

Sr. No. of Question paper : XXXX
Unique Paper Code : 61011504
Name of the Paper : Legal Aspects of Business
Name of the Course : Bachelor of Management Studies (BMS) (CBCS)
Semester : V
Duration : 3 Hours

Maximum Marks : 75

Instructions for candidates:

1. This paper contains 6 questions. Attempt ANY FOUR questions.

2. All questions carry equal marks.
3. Quote the relevant sections and cases wherever required.

Q1. (a) Critically Analyse:

(i) Only writing and registration can bring a valid contract into existence.
(ii) A provisional acceptance conveyed will bind both the parties.
(iii) A school organized a summer camp for the students of class 9. Raghu, a
student requested his father’s friend Ramesh to pay the fees as his parents were
not able to finance the same. Do you think Ramesh can recover the same from
Raghu or his father? (2.5+2.5+3.75=8.75 marks)

(b) Define bailment. Explain the salient features of contract of bailment. (10 marks)

Q2. (a) Critically Analyse:

(i) The proposal sent for transmission lost on the way can bring a contract into
existence.
(ii) A person of unsound mind will be personally liable for the necessaries
supplied to him.

1
 (iii) Abhay becomes surety to Uday for a loan extended to him by Devansh.
Without consulting the surety, Devansh gave away the security deposited by
Uday. When Uday defaults in payment, can the surety be held liable?
(2.5+2.5+3.75=8.75 marks)

(b) Distinguish between a Condition and a Warranty with reference to Sale of Goods.
Also explain briefly the Implied Warranties as per the Sale of Goods Act, 1930.
(10 marks)

Q3. (a) Critically analyse

(i) A mistake as to identity will bring a valid contract into existence.
(ii) A finder of lost goods will become the owner of the goods.
(iii) Electricity and Copyrights are covered under the Sale of Goods Act, 1930.
(2.5+2.5+3.75=8.75 marks)

(b) Explain briefly the various clauses of Memorandum of Association. Also distinguish
between AOA and MOA. (10 marks)

Q4. (a) Critically Analyse:

(i) Under undue influence, consent is taken by deceiving the party to the contract.
(ii) Shareholders are the owners of the property of the company.
(iii) A sent a letter of offer on 20th November, 2020, which reaches B on 25th
November, 2020. B instructs her secretary to send the acceptance after 30th
November, 2020 but A decides to revoke his offer on 22nd November, 2020 which
reaches on 1st December, 2020. Decide whether the revocation is valid.
(2.5+2.5+3.75=8.75 marks)

(b) ‘No Consideration no Contract’ is a rule. Do you agree with this statement? State the
exceptions to this rule. (10 marks)

Q5. (a) Critically Analyse:

(i) In a pledge, the ownership of the goods passes to the creditor.
(ii) A body corporate can be appointed as a designated partner of LLP.
(iii) C had supplied raw materials for two years to ABC Private Ltd. B, one of the
directors, had negotiated the contract. The company went in for liquidation. C
wants to sue B the director, to recover his dues. Decide whether C will succeed.
(2.5+2.5+3.75=8.75 marks)

2
(b) Explain the concept of doctrine of supervening impossibility. Explain the situations
where this concept is not accepted as a defence by the courts. (10 marks)

Q6. (a) Critically Analyse:

(i) A consumer who has a grievance against the order of the district forum cannot
file an appeal.
(ii) A citizen can seek personal information of an individual under RTI.
(iii) Mr C was the owner of shares worth Rs. 10 lakh in ABC Private Ltd. The
company goes for dissolution and C claims that he is the owner of liquid assets of
the company worth Rs. 10 lakh and should get priority over others at the time of
winding up. Decide whether he will succeed. (2.5+2.5+3.75=8.75 marks)

(b) Explain the role of different forums available for redressing the consumer grievance
as per the Consumer Protection Act, 2019. (10 marks)

3
Unique Paper Code : 61017922

Name of the paper : Multinational Business Finance

Name of the Course : Bachelor of Management Studies (BMS), 2020 CBS

Semester : V

Duration : 3 Hours

Maximum Marks : 75

Instruction for Candidates

1. Write your roll no. on the top immediately on receipt of this question paper.
2. Attempt 4 questions in all
3. All questions carry equal marks.

1. “India has rolled out an ambitious plan of ₹111 trillion investments during 2020-25 to
develop social and economic infrastructure under the national infrastructure pipeline
(NIP). While initial estimates put 40% of the expected capital expenditure to be
contributed by states followed by 39% by the centre and 21% by private sector, those
ratios may tilt significantly towards the private sector with significant stress in finances
of central and state governments post the coronavirus induced slowdown. With Indian
legacy companies highly leveraged, attracting foreign investment is the only viable
option for the government to meet its infrastructure and growth deficits.”
(i) Comment your views on how India can become an attractive investment destination
for foreign investors.
(ii) What impact will India’s “Consolidated FDI Policy of 2020” have on investment
flows into the country?

(18.75 marks)

1
2. Following are the forward quotes from Reuters per USD
Currency 1 Month 3 Month 6 Month
Mexican Peso 35/40 55/65 70/80
Canadian 50/60 80/90 110/120
dollar
Japanese Yen 10/15 14/22 20/30

Obtain the spot bid and ask rates prevailing on the date of examination of the above
currencies online and answer the following questions:-
(i) Calculate outright quotes for bid and ask and the number of points spread between
each.
(3.75 marks)
(ii) What do you notice about the spread as quotes evolve from spot towards 6 months?
(3.75 marks)
(iii) What will be the effective exchange rate if you wish to buy Canadian Dollar 6
month forward with Japanese Yen?
(3.75 marks)
(iv) Compute the currency mid rates for each maturity.
(3.75 marks)
(v) What is the annual forward premium/discount for all maturities of all currencies?
(3.75 marks)
3. (a) A foreign exchange trader for a bank in New York has $1 million (or its Swiss franc
equivalent) for a short-term money market investment. Suggest whether he should
invest in U.S. dollars for 90 days or make a covered interest arbitrage (CIA) investment
in the Swiss franc by giving appropriate justifications. He faces the following quotes:

Spot Rate (USD/CHF) Obtain online the rate prevailing on

examination day.
Annual forward premium on the Swiss 1.189%
Franc
USD one-year interest rate 6%
Swiss franc one-year interest rate 4%
(8.75 marks)

2
 (b) “While investment by Foreign Institutional Investors (FIIs) has become a dynamic
force in the development of Indian stock market, it is also seen as an important cause
of stock market volatility”. In the light of the above statement discuss the impact of FIIs
on Indian Stock Market. On account of the pandemic, has any sector seen a surge in
flow of FII money in India?

(10 marks)

4. (a) VCN, a Greek-based private equity firm, is trying to determine what it should pay
for Yummy Times, a food processing firm in Bangladesh. VCN estimates that Yummy
Times will generate a free cash flow of 90 million Bangladeshi Taka (BDT) next year
(2021), and that this free cash flow will continue to grow at a constant rate of 9.0% per
annum indefinitely.

A private equity firm like VCN, however, is not interested in owning a company for
long, and plans to sell Carambola at the end of three years for approximately 15 times
Yummy Time’s free cash flow in that year. The Bangladeshi inflation rate is expected
to remain at a relatively high rate of 14% per annum compared to the Greek euro
inflation rate of only 3.0% per annum. VCN expects to earn at least a 17% annual rate
of return on international investments like Yummy Times.

Obtain the current spot exchange rate online prevailing on the day of examination
between Bangladeshi Taka and euros and answer the following questions

(i) What is Yummy Times worth if the Bangladeshi taka were to remain fixed over
the three-year investment period?
(ii) What is Yummy Times worth if the Bangladeshi taka were to change in value
over time according to purchasing power parity?

(10 marks)

(b) Xiaomi’s Cost of Capital. Xiaomi has rapidly grown during the last five years to
become one of the largest smartphone manufacturers. Having most of its sales in China,
its average annual sales over the last five years amounted to around 100 billion Chinese
yuan (CNY). Now that the company is planning on expanding into global markets
outside China, it needs to carefully measure its weighted average cost of capital in order
to make prudent decisions on new investment proposals. Assuming a risk-free rate of
4.375%, an effective tax rate of 29%, and a market risk premium of 5%, what is the

3
 estimated weighted average cost of capital for its two competitors ChiFoSmart and
ChinaFone? How can you estimate a comparable WACC for Xiaomi?

Note:- The company beta of Xiaomi can be assigned by yourself after considering
the information given in the table and by giving proper justifications for the same.

ChiFoSmart ChinaFone Xiaomi

Company Sales CNY 15 Billion CNY 20 Billion CNY 200 Billion
Company Beta 0.65 0.76 ?
Credit Rating A A AA
Weighted average 6.5% 7.125% 6%
cost of debt
Debt to total Capital 38% 32% 20%
International sales 10% 20% 25%

(8.75 marks)

5. (a) Describe the different steps and documents involved in exporting motors from
United States to Hong Kong using a confirmed letter of credit, with payment terms of
90 days. What alternatives are available to the exporter to finance this shipment?
(13.75 marks)

(b) The following is a transaction matrix of a MNE:

Paying Subsidiary
Receiving subsidiary Germany Hong Kong US
Germany - €10M €6M
Hong Kong HK$ 5M - HK$ 20M
US $12M $16M -

The company has introduced a system of multilateral netting to minimize the number of inter
group payments. The US dollar will be used as the settlement currency. Obtain the spot
exchange rates online prevailing on the day of examination to convert all amounts to US
Dollar terms. (5 marks)

4
 6. (a) What is a transnational corporation? How is it different from a MNC? Why is
Nestle company considered a transnational corporation?
(13.75 marks)
6. (b) You have the following information from the money market and foreign exchange
markets of USA and UK

USA UK
Spot Exchange Rate Obtain the rate online
prevailing on examination
date
Interest rate Unknown 5%
(annualised)
Expected inflation 6% 2%
rate

Both the markets are very efficient and the parity conditions hold true (both PPP and
IRP)

(i) Estimate the interest rate in USA next year

(ii) Estimate today’s one-year GBP/USD forward exchange rate assuming IRP
holds true
(5 marks)

5
Unique paper Code : 61017932
Name of the Paper : Personal Selling and Sales Force
Management
Name of the Course : Bachelor of Management Studies
Semester : V
Duration : 3 hours
Maximum Marks : 75

Instructions for the Candidates:

1. Attempt ANY FOUR questions.
2. All questions carry equal marks.

SET A

Q1. How would the sources and methods of recruiting salespeople differ among: a national
firm selling home decorative items, a furniture manufacturer selling high quality products
nationally through selected retail outlets?
Assume that a company wants to hire a sales engineer and fill a position where the major
emphasis is on technical product knowledge. Should this firm recruit engineers and train
them to sell or recruit sales representatives and teach them the necessary technical
information and abilities?

Q2. You are a sales manager and have to choose between two sales recruits for your team.
One has scored very high in terms of the quality of his interview, but not very well on the
series of psychological tests to predict qualities you think are necessary for success. Another
person did well on the psychological testing but not very well in the personal interview. All
other things being equal, which one would you hire and why?
How can a sales manager keep top-notch sales representatives interested in the continual
sales training programs? What kind of training is needed for a sales person who has been
promoted to a sales management position?

Q3. A sales manager is facing problems such as: salespeople tend to overemphasize the easy
to sell parts of multiple product lines in an effort to build sales volume, other, more profitable
lines are forced into the background; salespeople are not taking time to develop new
accounts; to improve a company’s long term position salespeople should be doing more
missionary work and developing long-term customers to meet expected competition. Suggest,
giving reasons, a specific type of compensation plan that may be used to solve each of these
problems.
How can factors such as caliber of salespeople, nature of the job and financial position of the
company influence choice of sales force compensation plan by an organization?

Q4. How should a manager decide what weights to place on the quantitative versus the
qualitative factors in an evaluation process?
The DESKTOP XEROX 2300 copier is a versatile model that delivers the first copy in six
seconds. It is also the lowest-priced new Xerox copier available. The 2300 is designed as a
general purpose office copier and occupies less than half the top of a standard desk. The new
unit copies on a full range of office materials as large as 8½ by 14 inches. A special feature is
its ability to reproduce5½ - by 8½ - inch billing statements from the same tray used for letter-
size or legal-size paper. Selling price of the 2300 will be as low as Rs 35,000. What are the
features, advantages, and benefits of the DESKTOP XEROX2300 copier? List two additional
features, advantages, and benefits that a Xerox salesperson could use in presenting the new
copier to a prospective buyer.

Q5. A salesperson’s knowledge needs to extend into many areas such as general company
knowledge; product knowledge; knowledge of upcoming advertising and promotional
campaigns; knowledge about company price, discount, and credit policies; and knowledge
about the competition, the industry, and the economy. These are all vital for sales success.
For each of these categories, explain how a salesperson’s knowledge can lay the groundwork
for successful selling.
An important part of planning a sales call is the Pre-approach stage. What are the major
components of the Pre-approach? What is the difference in the preparation level of a HUL
salesperson selling consumer products versus an industrial salesperson selling products for a
company such as IBM?

Q6. You plan to give a presentation of your company’s product Dyno Electric Cart to the
purchasing agent of a company having a manufacturing plant that covers 200 acres. Which
method would be the best technique for your presentation and why?
Halfway through your sales presentation, your prospect stops you and says, “That sounds like
a great deal and you certainly have a good product, but I’m not interested now; maybe later.”
What should you do?
 SET B
Unique Paper Code : 61011503

Name of the Paper : Quantitative Techniques in Management

Name of the Course : Bachelor of Management Studies (CBCS)

Semester :V

Duration : 3 hours

Maximum Marks : 75

Instructions to Candidates:

(i)All Questions carry equal marks.

(ii) The Question paper contains 6 Questions.

(iii)Attempt any 4 Questions in all.

(iv) Use of Simple Calculator is allowed.

Q 1A manufacturer makes three models of storage bins: small, medium and large. Processing
of these storage bins is done on three machines: M1, M2 and M3. The small model requires 4
hours on M1, 8 hours on M2, and 6 hours on M3. The medium model requires 6 hours on M1,
6 hours on M2, and 4 hours on M3 while the model large requires 4 hours on M1, 2 hours on
M2, and 8 hours on M3. There are 240 machine hours per month available on M1, 320
machine hours per month available on M2, 200 machine hours per month available on M3.
The per unit profit gained from small model is Rs 80, from medium model is Rs 70 and from
large model is Rs 60. Formulate the given problem as an LPP and solve it using the simplex
method. What should be the monthly production of each type of storage bin in order to
maximise profit? Determine the optimal amount of profit. Identify if there will be unused
capacity on any machine? Also, formulate the dual of the above LPP.

Q 2There are two companies A and B in a certain city. Both firms have the same reputation
and enjoy equal market share. Both companies want to attract greater number of customers
by using innovative media strategies. Company A has constructed the following matrix of
increase in sales(in ₹ Lakh) for various strategy combinations of the two companies:

Strategies for B

Strategies for A B1 B2 B3 B4

A1 3 -1 6 7

A2 -1 8 15 12

A3 16 13 14 10

A4 1 11 2 1

Assuming a zero-sum game, determine the optimal strategy of the two companies and value
of the game.

Q 3A market survey is made on three brands of breakfast foods X, Y and Z. Every time the
customer purchases a new package, he may buy the same brand or switch to another brand.
The following transition matrix for brand switching has been obtained:

Next period brand

X Y Z

Present X 0.80 0.15 0.05

brand
Y 0.12 0.75 0.13

Z 0.10 0.12 0.78

At present it is estimated that 30 per cent of the people buy brand X, 20 per cent buy brand Y
and 50 per cent buy brand Z. Find the market share of the three brands at the end of two
periods. Compute the probability of a customer purchasing brand X at present buying brand Z
at the end of period 3. Also, find the long-run market share of the three brands.

Q 4 Given below is the simplex table for a linear programming problem, use the information
to answer the questions that follow:

Cj→ 6 3 0 0 0

Cj Basic X1 X2 S1 S2 S3 bi
Variable

6 X1 1 ½ 1/2 0 0 4

0 S2 0 -1/2 -3/2 1 0 6

0 S3 0 1 0 0 1 3

Is the given solution optimal? Give reason for your answer. State the optimal solution and the
shadow price of the resources. Is there more than one optimal solution? If yes, find the
alternate solution.

What is the range within which the objective function coefficient of the decision variable X1
can vary? Also, determine the change in solution when the objective function coefficient for
X2changes to 5 in the given simplex table.

Q 5 A civil engineering firm has secured a contract to construct a dam. It has identified the
following tasks which have to be completed for the completion of the project along with their
respective duration:

Activity A B C D E F G H I J

Precedence - - - B A C E, F D, F G, H I

Duration Shortest 3 8 4 2 1 7 5 6 8 9

(in months) Longest 17 18 12 12 7 11 5 12 18 21

Most likely 7 10 5 4 4 9 5 9 13 15

Draw the network diagram and determine the critical path.Estimate the expected duration and
variance of the project.

Find the probability that the project will be completed after55 months. If the project manager
wants to be 90% sure that the project should be completed in time, how many months prior to
the deadline should he start it? Also calculate the chance of completing the project between
45 and 50 months?

Q 6 An event management company is booking four groups, each of which would give one
singing performance in a particular city. Because of the local preferences of the people, the
company is expecting that different groups will attract different audience size. Five major
cities are under consideration of the company for organizing the singing performances. The
estimate of sale of tickets is given as follows:

Group City

(Estimated sale of tickets in ₹ ‘000)

Pune Bhopal Kalimpong Dehradun Shimla

Symphony 58 56 21 50 45

Opus 16 34 18 25 15

Sonata 39 44 30 64 36

Concerto 82 102 71 110 73

Considering the sale of tickets that is likely to be made, what group – city combination would
you suggest in order to maximise revenue? What will be the maximum revenue that can be
earned? Which city will not host any singing performance? If for certain reason, the group
Sonata cannot perform in Shimla, will the optimal assignment schedule change? Give reason
for your answer.
Unique Paper Code : 61017919
Name of the Paper : Transnational and Cross Cultural Marketing (DSE 1)
Name of the Course : BMS
Semester : V
Duration : 3 hours
Maximum Marks : 75 Marks

Instructions for Candidates:

Attempt any four questions. All the questions carry equal marks.

Set A
1. “For a Transnational corporation, choosing which country to enter as a new market is a
difficult and involves high risk, high return scenario.” Elaborate upon the relevance of
this decision for a transnational company’s growth in a foreign market. Using the CAGE
framework as suggested by Ghemawat, describe some of the factors that a corporation
should consider while deciding which country to expand into. Taking the example of a
FMCG product, which sort of expansion model/approach should it look towards
employing and why.
2. Due to competition and shrinking domestic market, a moderate size Indian company in
the salad dressing industry has decided to tap global markets. Suppose you were asked to
prepare a cultural analysis for a potential market. What would you do? Outline the steps
and comment briefly on each.
3. In July 2018, the Government of India increased the import duties on 76 textile items and
followed up with increased duties on 328 textile items the next month. It also appointed a
task force under the cabinet secretary, the senior-most civil servant, to look into ways of
reducing import dependence. The stated aim is brazenly protectionist. On a TV program,
a Finance Ministry official said the duties were levied on “simple” items that could easily
be manufactured in India by small manufacturers. Another official in the prime minister’s
office argued that India gained nothing by letting the Chinese dump simple items like
plastic toys, kites, candles, clocks, and the like onto the Indian market, and protecting
 their domestic manufacture would not affect India’s overall competitiveness or
productivity.
In the context of the above information answer the following:
Explain why and how countries use protectionism. Antidumping laws were designed to
prevent foreign producers from “predatory pricing. Explain what is understood by
dumping and how antidumping measures have extended protectionism?
4. Today many companies talk about localization, but find it difficult to do. Sometimes
expatriate managers are unable or unwilling to train their successors. This can be a
particular problem for Japanese companies. The standard practice in Japanese
multinationals has been to rely on people sent from the home office, even for mid-level
technical jobs. In part, this stems from a tradition of apprentice-style training, which can
mean Japanese firms ‘‘struggle to get new people up to speed quickly,’’ says Akihiko
Kopp, principal of Japan Intercultural Consulting, a training firm. Language is often an
added complication in going abroad. A further difficulty is that many Japanese
expatriates and their families prefer to stay in America, say, rather than return home. As a
result, Japanese employees abroad tend to hand over little responsibility to their local
colleagues. Discuss the advantages and disadvantages of localization of executives. Do
you think Japanese situation is applicable to other regions? Why or why not? Discuss
strategic solutions regarding difficulties of localization for Japanese companies.

5. “Many times MNCs offer different brands (for a similar product) in the countries they
operate in.” In light of this statement, explain the logic behind having multiple brands in
and for different markets. What are the advantages and disadvantages of this? Support
your answer with pertinent examples.

6. MNCs need to make decisions regularly and clearly, making sure that their processes for
determining prices are adapted to the unique conditions in emerging markets. Only then
can local team leaders know what they should prioritize as they react to changing
conditions on the ground. In this perspective should MNCs approach pricing as part of a
broader set of strategic questions? Also outline the process of setting the price of a
product in overseas market.