Target 100 % Marks CA Aaditya Jain Only For Nov 2020 Attempt In SFM .

Mustany Visit AADITYAJAIN.COM Target 100 % Marks For query mail at Only For Nov 2020 Attempt DOWNLOAD SECTION For Q-9 solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION CA Aaditya Jain In SFM CONVERSION PREMIUM Conversion Premium or Premium Over Conversion Value Market Price Of Convertible Bond-Fair Conversion Value Of Convertible Bond As On Today It should be further divided by Fair Value Of Convertible Bond to calculate answer in %. CONVERSION PARITY PRICE Market Price Of Convertibl e Bond No.of Shares on Conversion It is the price at which premium will be 0. Conversion Parity Price CONVERSION PARITY PRICE PREMIUM PER EQUITY SHARE IN Rs: [Also Known As Conversion Premium Per Share ] Conversion Parity Price of Equity - Actual Market Price of Equity IN %: [Also Known As Ratio Of Conversion Premium ] Conversion Parity Price of Equity - Actual Market Price of Equity Actual Market Price of Equity FAVOURABLE INCOME DIFFERENTIAL PER SHARE Coupon Interest From Debenture Conversion Ratio Dividend Per Share Conversion Ratio i.e No. Of Equity Shares PREMIUM PAY BACK PERIOD Conversion premium per Equity share Favourable Income Differenti al Per Share COST OF REDEEMABLE PREFERENCE SHARES Maturity Value – PSC0 Annual Dividend n K p Maturity Value PSC0 2 Note On PSCo: PSC 0 Current Market Price [In case of existing preference share];and P0 Net Proceeds Where Net Proceeds Face Value Premium - Discount - Flotation Cost [ In case of new w preference share ] COST OF IRREDEEMABLE PREFERENCE SHARES Kp Annual Dividend PSC O Sometimes when relevant information is not given for calculation of Kp then we simply use Kp Rate Of Preference Dividend VALUE OF IRREDEEMABLE PREFERENCE SHARES Value Of Irredeemable Preference Shares(PSCo) Annual Dividend Kp MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks Only For Nov 2020 Attempt Q-10 In SFM VALUE OF REDEEMABLE PREFERENCE SHARES Value of Preference Share (PS0 ) Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION Dividend Dividend Dividend Maturity Value . (1 KP )1 (1 KP )2 (1 KP )n (1 KP )n VALUE OF BOND UNDER REINVESTMENT CONCEPT In such case our equation is B 0 Coupon Amount x n Face Value (1 YTM)n DIRTY PRICE AND CLEAN PRICE Dirty Price Clean Price Accrued Interest BASIS POINT 1 % 100 basis points CALCULATION OF BO WHEN ENTIRE PRINCIPAL & INTEREST AMOUNT IS RECEIVED AT MATURITY YEARS Face Value(1 Coupon Rate)n In such case our equation is : B 0 (1 YTM)n CALCULATION OF YTM OF HALF YEARLY INTEREST PAYMENT BOND Maturity Value – Bo Interest per 6 months nx2 Kd Of 6month Maturity Value Bo 2 Now Kd p.a Kd for 6 month x 2 NET ASSET VALUE (NAV) Symbolically : NAV Net Asset Number Of Units Total Asset - Total External Liability Number Of Units Where net assets of the scheme will normally be: Total Asset - Total External Liability [ Market Value of Investments Receivables Accured Income Other Assets ] - [ Accured Expenses Payables Other Liabilities ] EXPENSE RATIO Expense Ratio Expenses Incurred Per Unit Average NAV Where Average NAV Opening NAV Closing NAV 2 HOLDING PERIOD RETURN(HPR) Holding Period Return NAV end NAV beginning Dividend Received Capital Gain Received NAV at the beginning MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Q-11 Only For Nov 2020 Attempt Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION RELATIONSHIP BETWEEN RETURN OF MUTUAL FUND, RECURRING EXPENSES , INITIAL EXPENSES AND RETURN DESIRED BY INVESTORS Return Required By Investors Return Of Mutual Fund Recurring Expenses (1 Initial Expenses) DIVIDEND YIELD METHOD OR DIVIDEND CAPITALIZATION VALUATION METHOD Dividend Per Share (DPS) Dividend Yield Market Price Per Share (MPS) Market Price Per Share Dividend Per Share (DPS) Dividend Yield EARNING YIELD METHOD OR INCOME OR EARNING CAPITALIZATION VALUATION METHOD Earning Per Share (EPS) Earning Per Share (EPS) Earning Yield Market Price Per Share (MPS) Market Price Per Share Earning Yield PRESENTATION OF INCOME STATEMENT TO CALCULATE MPS Sales xxx Less: Variable cost xxx Contribution xxx Less: Fixed cost xxx EBIT xxx Less: Interest xxx EBT xxx Less: Tax xxx EAT xxx Less:Preference Dividend xxx EFE(Earning for Equity) xxx No. of Equity Shares xxx EPS xxx PE Ratio xxx MPS (EPS x PE Ratio) xxx VALUE OF FIRM USING FUTURE MAINTAINABLE PROFITS(FMP) Future Maintainab le Profit Relevant Capitaliza tion Rate Calculation Of Future Maintainable Profits : Average Past Year Profits Add : All Actual Expenses and Losses not likely to occur in future All Profits likely to arise in Future Less : All Expenses and Losses expected to arise in future Less : All Profits not likely to occur in future Future Maintainable Profits ( FMP ) Value Of Business xxxx xxxx xxxx (xxxx) (xxxx) xxxx MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks Only For Nov 2020 Attempt Q-12 In SFM PRICE EARNING [P/E] RATIO VALUATION METHOD Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION MPS MPS P/E Ratio EPS EPS Note : Total Market Value can be calculated by multiplying MPS with Number of Equity Share . Note : If we take total earning in the above formula we will directly get Market Value . Price Earning Ratio [ P/E Ratio ] NET ASSET VALUATION METHOD Net Assets Value [ Total Assets - Total External Liability ] Net Asset Total Number Of Equity Share Note : Total Asset and Total External Liability may be taken on the basis of Market Value , Liquidation Value or Book Value as the case may be . Note:If question is silent always use Market Value Approach. Net Asset Value Per Equity Shareholder DISCOUNTED CASH FLOW(DCF) APPROACH/FREE CASH FLOW APPROACH It is a method of evaluating an investment by estimating future cash flows and taking into consideration the time value of money. Note : How To Calculate Free Cash Flow : EBDITA xxx (-)Depreciation xxx (-)Amortization xxx (-)Interest xxx EBT xxx (-)Tax xxx EAT xxx Deprecciation xxx Amortization xxx -Increase In Working Capital xxx Decrease In Working Capitalxxx -Capital Expenditure xxx Free Cash Flow xxx VALUATION OF COMPANY/FIRM Value Of Firm Value Of Equity Value Of Debt CHOICE OF CORRECT DISCOUNT RATE WHILE CALCULATING VARIOUS VALUES Use Of Discount Rate Value Of Firm Ko Value Of Equity Ke Value Of Debt Kd CALCULATION OF CAPITAL EMPLOYED Capital employed can be calculated in two ways one way is to calculate from liabilities side and other way is to calculate through asset side. Let’s look at both ways Liabilities side Capital employed Equity Share Capital Preference Share Capital Reserves – Fictitious Assets Debentures Long Term Loans MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Q-13 Only For Nov 2020 Attempt Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION Assets Side Capital Employed Fixed assets (excluding Fictitious Assets) Current assets – Current liabilities SHARE EXCHANGE RATIO BASED ON EPS EPS of Target Firm (B Ltd) EPS of Acquiring Firm(A Ltd) Share Exchange Ratio SHARE EXCHANGE RATIO BASED ON MPS MPS of Target Firm (B Ltd) MPS of Acquiring Firm (A Ltd) Share Exchange Ratio SHARE EXCHANGE RATIO BASED ON BOOK VALUE PER SHARE (BVPS) Share Exchange Ratio Book Value Per Share of Target Firm (B Ltd) Book Value Per Share of Acquiring Firm (A Ltd) SHARE EXCHANGE RATIO BASED ON NET ASSET VALUE PER SHARE(NAV) Share Exchange Ratio Net Asset Value of Target Firm (B Ltd) Net Asset Value of Acquiring Firm (A Ltd) TOTAL NO. OF EQUITY SHARES AFTER MERGER NA NB ER EPS (A B) WHEN SHARES ARE ISSUED EPS of the Combined Firm after Merger Total Earning After Merger E E Synergy Gain A B Total No. Of Equity Shares After Merger NA NB ER MPS (A B) WHEN SHARES ARE ISSUED 1st Preference :[to be used when PE A B is given or any hint regarding this is given] MPS of Combined Firm after Merger EPS A B P/E Ratio A B or 2nd Preference : MPS of Combined Firm after Merger Total Market Value After Merger MVA MVB Synergy Gain (If Any) NA NB ER Total No. Of Equity Shares After Merger MARKET VALUE OF MERGED FIRM 1st Preference :MV (A B) EPSA B P/E RatioA B [NA NB ER] 2nd Preference :MV (A B) MV A MV B Synergy EQUIVALENT EPS OF B LTD IN A NEW COMPANY EPS ( A B ) x ER EQUIVALENT MPS OF B LTD IN A NEW COMPANY MPS ( A B ) x ER MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Q-14 Only For Nov 2020 Attempt Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION NEW NO. OF EQUITY SHARES ISSUED TO B LTD. N B ER CALCULATION OF % HOLDING IN MERGED COMPANY For ALtd : Total No. Of A Ltd Shares Total No. Of A Ltd Shares Total No. Of New Shares Issued To B Ltd For BLtd : Total No. Of New Shares Issued To B Ltd Total No. Of A Ltd Shares Total No. Of New Shares Issued To B Ltd EPS A B WHEN SYNERGY IS EXPRESSED IN AMOUNT (Earning A EarningB Synergy Gain) EPSA B NA NB x ER EPS A B WHEN SYNERGY IS EXPRESSED IN % (Earning A EarningB ) (1 Synergy Gain) EPSA B NA NB x ER MAXIMUM EXCHANGE RATIO TAKING EPS BASE-FOR A LTD Maximum Exchange Ratio ( i.e the Exchange Ratio at which EPS of Firm’s A shareholder before and after merger will be same ) EPS Before Merger EPS after Merger EA EB Synergy EPS A N N ER A B Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. MINIMUM EXCHANGE RATIO TAKING EPS BASE-FOR B LTD Minimum Exchange Ratio ( i.e the Exchange ratio at which EPS of Firm ’s B shareholder before and after merger will be same ) EPS Before Merger Equivalent EPS after Merger EPSB EPS A B ER E E Synergy EPSB A B ER NA NB ER Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. IF DECISION IS BASED ON MPS [ AND IF P/E RATIO AFTER MERGER FOR A LTD IS GIVEN OR ANY HINT IN THE QUESTION IS GIVEN REGARDING THIS ] :For A Ltd : Maximum Exchange Ratio ( i.e the Exchange Ratio at which MPS of Firm ’s A shareholder before and after merger will be same ) MPS Before Merger MPS After Merger MPS A MPS A B MPS A P/E Ratio A B EPSA B MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Only For Nov 2020 Attempt Q-15 Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION EA EB Synergy MPS A P/E RatioA B N N ER A B Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. IF DECISION IS BASED ON MPS [ AND IF P/E RATIO AFTER MERGER FOR A LTD IS GIVEN OR ANY HINT IN THE QUESTION IS GIVEN REGARDING THIS ] For B Ltd : Minimum Exchange Ratio ( i.e the Exchange ratio at which MPS of Firm ’s B shareholder before and after merger will be same ) MPS Before Merger Equivalent MPS after Merger MPS B ER MPS A B MPSB ER EPS A B P/E Ratio A B E A EB Synergy MPSB ER P/E Ratio A B N N ER A B Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. IF DECISION IS BASED ON MPS [ AND IF P/E RATIO AFTER MERGER IS NOT GIVEN ] :For A Ltd : Maximum Exchange Ratio ( i.e the Exchange Ratio at which MPS of Firm ’s A shareholder before and after merger will be same ) MPS Before Merger MPS After Merger MPS A MPS A B MPS A NA MPSB NB Synergy Gain MPS A No. of Equity Shares A No. Of Equity SharesB Exchange Ratio Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. IF DECISION IS BASED ON MPS [ AND IF P/E RATIO AFTER MERGER IS NOT GIVEN ] :For B Ltd : Minimum Exchange Ratio ( i.e the Exchange Ratio at which MPS of Firm ’s B shareholder before and after merger will be same ) : MPS Before Merger Equivalent MPS after Merger MPS B ER MPS A B MPS N MPS N Synergy Gain A A B B MPSB ER No. of Equity Shares No. Of Equity Shares ER A B Now by solving the above equation keeping Exchange Ratio constant we can find desired Exchange Ratio. COMPONENTS OF MARKET PRICE PER SHARE Market Price Per Share(MPS) Earning Per Share (EPS) Price Earning Ratio (PE Ratio) Earning For Equity Shareholde r No. of Equity Share Market Price Per Share Earnings Per Share Return on Equity(ROE) Book Value / Intrinsic Value Per Share ] Earning For Equity Shareholde r Equity Shareholde r' s Fund Market Price Per Share Earnings Per Share Equity Shareholde r' s Fund Market Price Per Share Earnings Per Share No. of Equity Shares MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

Mustany Visit AADITYAJAIN.COM Target 100 % Marks For query mail at Only For Nov 2020 Attempt DOWNLOAD SECTION For Q-16 solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION CA Aaditya Jain In SFM Where Equity Shareholder's Fund Equity Share Capital Reserves - P/L account ( Dr.) EPS A B WHEN CASH IS PAID OUT OF BORROWED MONEY (Earning A EarningB Borrowed Amount Interest Rate (1 Tax Rate) EPSA B NA EPS A B WHEN CASH IS PAID OUT OF BUSINESS MONEY EPSA B (Earning A EarningB Cash Paid Opportunity Cost Of Interest (1 - tax) NA MARKET VALUE AFTER MERGER WHEN GROWTH RATE OF B LTD UNDER NEW MANAGEMENT INCREASES Market Value After Merger MPS A x No. Of Equity Share A New MPS B Taking new growth rate x No. Of Equity Share B Synergy to be taken as zero NPV OF A LTD UNDER MERGER PV Of Cash Flows Received By A Ltd From B Ltd xxx Less: Cost of Acquisition Paid By A Ltd To B Ltd xxx NPV Of A Ltd if B Ltd is acquired xxx Decision:If NPV is positive, Altd should takeover Bltd. COST OF MERGER-WHEN CASH IS PAID-FOR A LTD Cost Cash Paid - Market Value Of B received COST OF MERGER-WHEN SHARES ARE ISSUED-FOR A LTD Cost Value of shares given – Value Of B Received Combined Value Of A & B –Value Of B received ed Where represents the % holding of B Ltd. in merged firm SYNERGY GAIN-BASED ON EARNINGS Merger Gain or Synergy Based On Earnings Total Combined Earning Of Merged Firm -[Earning Of A Earning Of B] SYNERGY GAIN-BASED ON MARKET VALUES Merger Gain or Synergy Based On Market Value Total Combined Market Value Of Merged Firm -[Market Value Of A Market Value Of B] EFFECT OF CASH TAKEOVER IN EARNINGS AND MARKET VALUE Total Earning After Merger Earning A Earning B - Opportunity/Borrowing Cost Of Cash Paid Adjusted For Tax Total Market Value After Merger Market Value A Market Value B - Cash Paid GROSS NPA(%) GNPA Ratio Gross NPA 100 Gross Advance or Deposit Given By Bank CAR [CAPITAL ADEQUACY RATIO] OR CRWAR [ CAPITAL TO RISK WEIGHTED ASSET RATIO] MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Q-17 Only For Nov 2020 Attempt Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION Total Capital Risky Weighted Assets CALCULATION OF SWAP RATIO IN CASE OF NEGATIVE FACTOR LIKE GROSS NPA CAR or CRWAR or Total Capital To Risk Weight Asset Ratio Swap Ratio Gross NPA Of A Ltd. Gross NPA Of B Ltd. CALCULATION OF RETURN OF A SECURITY OR ASSET Holding Period Return Price At The End Price At The Beginning Any Income Distribution Price At The Beginning STANDARD DEVIATION ( σ ) BASED ON PAST DATA Standard Deviation ( σ ) Standard Deviation ( ) (Given Return Average Return)2 n STANDARD DEVIATION ( σ ) BASED ON PROBABILITY probabilit y (Given Return Expected Return)2 VARIANCE Variance Standard Deviation 2 σ 2 Decision:Higher the variance,higher the risk. COEFFICIENT OF VARIATION (CV ):-PAST DATA Coefficient Of Variation measures Risk Per Unit Of Return. Standard Deviation Average Return Decision:Higher the CV , higher the risk. CV COEFFICIENT OF VARIATION (CV ) BASED ON PROBABILITY Standard Deviation CV Expected Return Decision:Higher the CV , higher the risk. RETURN OF PORTFOLIO-BASED ON PAST DATA The Return of the portfolio is the weighted average return of individual security . Return Of Portfolio A's Average Return Weight A B's Average Return Weight B RETURN OF PORTFOLIO ON THE BASIS OF PROBABILITY Return Of Portfolio A's Expected Return Weight A B's Expected Return Weight B Note : Sum of Weights used in Portfolio for different security will always be equal to 1 . STANDARD DEVIATION OF THE PORTFOLIO CONSISTING OF TWO SECURITY Standard Deviation [σ1 2 ] σ12 w12 σ22 w22 2 σ1 w1 σ2 w2 r 1,2 MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626

CA Aaditya Jain Target 100 % Marks In SFM Q-18 Only For Nov 2020 Attempt Mustany Visit AADITYAJAIN.COM For query mail at DOWNLOAD SECTION For solutionforsfm@gmail.com IMPORTANT PRACTICAL QUESTION Where , σ1 2 Standard Deviation of Portfolio consisting of Security 1 & 2 σ1 Standard Deviation Of Security 1 ; σ2 Standard Deviation Of Security 2 ; W1 Weight Of Security 1 ; W2 Weight Of Security 2 r 1,2 Coefficien t Of Correlatio n Between Security 1 and Security 2 ; COEFFI

CA Aaditya Jain Q-1 Only For Nov 2020 Attempt Target 100 % Marks In SFM For any query mail at solutionforsfm@gmail.com MUST JOIN AADITYA JAIN SIR TELEGRAM AMENDMENT GROUP.For Link Telegram Updates at 9911442626 Must Visit AADITYAJAIN.COM DOWNLOAD SECTION For IMPORTANT PRACTICAL QUESTION SFM FORMULA bOOK STRATEGIC FINANCIAL MANAGEMENT The Best .