Research Analyst – Feel Real Exam – 3

Fiscal policy contains policy measures of the government that deal with government revenues and expenses. It includes decisions on taxation, government spending, budget deficits or surpluses, and other related matters. Monetary policy, on the other hand, refers to the actions of the central bank in managing the money supply, interest rates, and credit conditions.

The initial margin charged by the Clearing Corporation is indeed a percentage of the transaction value arrived at based on the concept of "Value At Risk" philosophy.

When interest rates fall, bond prices rise due to the inverse relationship between bond prices and interest rates. To benefit from this view, the trader should buy long-dated high coupon bonds. The longer duration allows for a greater potential price appreciation, and the high coupon rate provides a higher yield.

Corporate Governance basically takes into account the integrity and transparency aspect of the management.

In the SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis, strengths and weaknesses are internal elements of a business, while opportunities and threats deal with the external environment.

PESTLE Analysis stands for Political, Economic, Socio-cultural, Technological, Legal, and Environmental Analysis. Healthy public finances and a consistent fiscal policy fall under the political factors category as they are influenced by government policies and actions.

Tata Nano is not an example of a Question Mark that succeeded. In the BCG Analysis, Question Marks represent business segments in a fast-growing market but with low market share. While the right strategies can help grow their market share, they often require substantial investments and may not generate enough cash. Despite being in a fast-growing market, Tata Nano has not been very successful in terms of market share and profitability.

Systematic risk, also known as market risk, refers to risks that affect the entire financial market or a wide range of investments. These risks are caused by factors that impact the economy or markets as a whole, such as changes in government policy, external factors, wars, or natural calamities. Unlike specific risks, systematic risks cannot be eliminated through diversification.

Companies may choose to buy back shares for various reasons. If a company has excess cash and a lack of profitable investment opportunities, it may opt to buy back shares to utilize its cash effectively. Buying back shares when the management thinks the stock is undervalued can provide support to the stock price and signal confidence in the company. Additionally, companies may buy back shares to reduce equity and increase leverage, which can have implications for capital structure and financial ratios.

A good research analyst should possess the ability to read and comprehend financial statements and reports, have good communication skills (both written and verbal), and be proficient in using tools like Excel and other data analytical tools. These qualities help analysts analyze data effectively and communicate their findings clearly.

The book value per share is calculated by dividing the net worth of the company by the number of outstanding shares. It represents the theoretical amount of money each share would receive if the company were to be liquidated.

The market capitalization of a company is calculated by multiplying the market price of each share by the number of shares outstanding. This reflects the total value of a company's outstanding shares in the market.

According to the Companies Act, when a company intends to raise further capital through an issue of shares, it must first offer them to the existing shareholders. This offer is known as a Rights Issue.

To calculate the sales based on the inventory turnover ratio, we can follow these steps:

Step 1: Calculate the number of inventory turnovers in a year.
- Given that the average age of inventory is 10 days.
- The number of inventory turnovers in a year = 365 days / 10 days = 36.5 times.

Step 2: Calculate the sales.
- Given that the inventory turnover ratio is Sales / Inventory.
- Rearranging the formula, Sales = Inventory turnover ratio x Inventory.
- Sales = 36.5 x Rs 2,000 = Rs 73,000.

Therefore, based on the given information, the sales amount is calculated to be Rs 73,000. This represents the total sales generated by the company based on the given inventory turnover ratio and inventory value.

A research analyst who is an individual or partnership firm should have net tangible assets of value not less than Rs. 1 lakh.

The Price to Earnings Ratio (PE Ratio) measures the price that the market is willing to pay for a company's earnings. A higher PE ratio indicates that the market is valuing the company's earnings at a higher multiple, making it relatively more expensive compared to its peers.

In industries with high rivalry, such as aviation and telecom, the intense competition leads to lower pricing power as companies compete to gain market share. This, in turn, results in lower incomes for the industry participants as they face pressure on profitability due to price wars and cost competitiveness.

The job of research analysts involves collecting data from various sources, scientifically analyzing the collected data, and making recommendations based on their analysis. Research analysts also have close interactions with companies to gather information and with clients to provide research reports and recommendations. Therefore, all of the above options are correct.

The main intention of SEBI guidelines for Research Analysts is to build confidence among the investors. While following compliance rules is part of that objective, the guidelines cannot guarantee that investors will never lose money in the market due to market movements.

The sale and purchase of newly issued shares, also known as initial public offerings (IPOs), happen in the primary market. The primary market is where issuers raise fresh capital by selling securities directly to investors. On the other hand, the secondary market is where already-issued securities are traded among investors, providing liquidity to these instruments.

Buy-side analysts indeed work for money managers such as mutual funds, hedge funds, pension funds, and portfolio managers. Their role is to provide investment research and recommendations to guide the investment decisions made by the fund managers. They work internally for these firms and focus on purchasing and selling securities for their own investment accounts or on behalf of their clients.

Zero-coupon bonds are always issued at a discount to their face values. These bonds do not pay regular interest like other bonds but are redeemed at par value upon maturity. The return on zero-coupon bonds is derived from the difference between the issue price and the redemption value.

The statement that all types of investment will result in capital appreciation over a long period of time is not true. Investments carry the risk of capital erosion, and different investment types have varying levels of risk, with equity being generally riskier than bonds.

To calculate the market capitalization of a company, you multiply the market price per share by the number of shares outstanding. In this case, let's follow the given steps:

1. Calculate the number of shares:
Number of shares = Paid-up capital / Face value per share
Number of shares = Rs 50 Lakhs / Rs 5 = 10 Lakhs

2. Calculate the market price per share:
Market price per share = PE ratio * EPS
Market price per share = 8 * Rs 5 = Rs 40

3. Calculate the market capitalization:
Market capitalization = Market price per share * Number of shares
Market capitalization = Rs 40 * 10 Lakhs = Rs 400 Lakhs

Therefore, the market capitalization of the company is Rs 400 Lakhs. This represents the total market value of the company's outstanding shares.

The PEG ratio is calculated by dividing the current price of the stock by the earnings per share (EPS) and then dividing that result by the growth rate. This ratio helps investors assess the stock's valuation relative to its growth potential.

To find the values of Current Assets and Current Liabilities, we can use the given ratios and equations. Let's break down the steps:

1. Current Ratio: The current ratio is calculated by dividing Current Assets by Current Liabilities. In this case, the current ratio is 2, which means Current Assets are twice the value of Current Liabilities.

Current Assets / Current Liabilities = 2

Since we're given that the ratio is 2, we can express Current Assets as 2 times Current Liabilities.

Current Assets = 2 * Current Liabilities

2. Quick Ratio: The quick ratio is calculated by subtracting Inventories from Current Assets, and then dividing the result by Current Liabilities. In this case, the quick ratio is 1.5.

(Current Assets - Inventories) / Current Liabilities = 1.5

Since we know that Current Assets are twice the value of Current Liabilities, we can substitute Current Assets with 2 times Current Liabilities.

(2 * Current Liabilities - Inventories) / Current Liabilities = 1.5

Simplifying further:

2 - Inventories / Current Liabilities = 1.5

Rearranging the equation:

2 - 1.5 = Inventories / Current Liabilities

0.5 = Inventories / Current Liabilities

3. Solving for Current Liabilities: From the equation above, we know that Inventories divided by Current Liabilities is equal to 0.5. Multiplying both sides of the equation by Current Liabilities, we get:

0.5 * Current Liabilities = Inventories

Dividing both sides by 0.5:

Current Liabilities = Inventories / 0.5

Given that Inventories is 8,000, we can substitute the value:

Current Liabilities = 8,000 / 0.5

Current Liabilities = 16,000

4. Calculating Current Assets: We already know that Current Assets are twice the value of Current Liabilities. Substituting the value of Current Liabilities:

Current Assets = 2 * 16,000

Current Assets = 32,000

Therefore, the solution is:

Current Liabilities = Rs. 16,000
Current Assets = Rs. 32,000

These values satisfy the given ratios and equations.

The most important priority for an investor is the safety of capital. Investors want assurance that their capital will be preserved and protected. While capital appreciation and return on capital are also important considerations, the safety of capital takes precedence as it ensures the investor's principal is secure.

Microeconomics is the study of economics on a smaller, more detailed scale, focusing on individual behavior and decision-making. Its importance and uses include understanding the functioning of a free market economy, determining price formation, examining individual and firm behavior regarding prices, and understanding the distribution of goods and services in an economy.

Thorough research in investment operations is required to understand the available investment options and determine their suitability for the investors' needs. However, seeking fast and quick returns is not a valid reason for thorough research, as it may lead to speculative or risky investments.

USDINR rate, attrition rate among employees, concentration of revenues with selected clients, concentration of geographies, etc., are important parameters to watch out for in IT and related sectors.

Old companies with a long track record give confidence to investors because they have witnessed multiple business cycles and have accumulated knowledge and experience to navigate new challenges successfully.

Investors can earn returns on their capital invested as well as rent on their property.

Businesses with high return on capital/equity create long-term wealth for shareholders/owners. While analyzing performance, analysts consider these financial and other ratios.

When a company increases its prices and the demand does not fall, it could be due to a combination of factors such as the company having pricing power in the market, strong brand loyalty among customers, and consumers being addicted to the company's products. Therefore, all of the above options are correct.

In this case, the option "The Equity shareholders have the first right of claim on the company's assets in case of liquidation" is NOT true. In case of liquidation, equity shareholders have one of the LAST claims on the company's assets.

SEBI has the authority to take multiple actions against an intermediary. It can issue a warning or censure, suspend the registration of the intermediary, or even cancel the registration, depending on the severity of the violation or non-compliance with regulations.

Under pricing is a situation where a security is priced lower than its fair value, providing an opportunity for investors to buy it at a discounted price.

The Dividend Payout Ratio can be calculated using either formula. Dividing the company's dividend per share by earnings per share provides the ratio on a per-share basis, while dividing the company's total dividend by net profit gives the ratio on a total basis. Both formulas provide insights into the company's dividend distribution in relation to its earnings.

Macroeconomics helps us understand the drivers of income, savings, investments, and employment in an economy.

Actually, the earnings yield is calculated by dividing the earnings per share (EPS) by the current price of the stock, and then multiplying by 100 to express it as a percentage. In this case, if the EPS is 32 and the current price of the stock is 540, the earnings yield can be calculated as:

Earnings yield = (EPS / Current stock price) * 100
Earnings yield = (32 / 540) * 100
Earnings yield = 0.0592 * 100
Earnings yield = 5.92%

So, you are correct. The earnings yield is 5.92%. It represents the return on investment for each rupee invested in the stock based on its earnings.

The demand and supply of a company's securities in the stock exchange is not a valuation parameter. Valuation parameters typically include financial ratios such as the P/BV ratio, the P/E ratio, and the intrinsic value of a company's stock. The demand and supply of securities in the stock exchange are influenced by market dynamics and investor sentiment but are not directly used as valuation parameters.

Companies may choose to buy back shares for various reasons. These include having excess cash and a lack of profitable investment opportunities, believing that the stock is undervalued and buying it back to give a value boost, and reducing equity to increase leverage in the company. Buybacks can also serve as a confidence-building measure or a defensive strategy against potential takeovers. Additionally, buybacks can help offset the impact of dilution in promoters' holdings due to actions like Employee Stock Option Plans (ESOPs).

To calculate the Enterprise Value (EV) of a firm, you can use the formula: EV = Market value of equity + Market value of debt - Cash and cash equivalents.

Given the following information:
- Market value of equity = Rs 50 lakhs
- Market value of debt = Rs 10 lakhs
- Cash and cash equivalents = Rs 3 lakhs

Substituting these values into the formula:
EV = Rs 50 lakhs + Rs 10 lakhs - Rs 3 lakhs
EV = Rs 57 lakhs

Therefore, the Enterprise Value (EV) of the firm is calculated to be Rs 57 lakhs. This represents the theoretical takeover price of the company, taking into account the market value of equity, market value of debt, and cash and cash equivalents.

Technical analysis involves forecasting stock prices based on the study of patterns in historical market data, such as price, volume, and time. It focuses on identifying trends and using various tools and indicators to predict future price movements. Economic analysis examines macroeconomic factors, fundamental analysis analyzes a company's financial performance, and behavioral analysis considers psychological factors affecting market behavior.

Inflation is defined as the general increase in price levels of goods and services in the economy, leading to an erosion of the purchasing power of money. Therefore, inflation causes an increase in price levels.

The Reserve Bank of India (RBI) is the manager of Indian Government's debt borrowings.

The Department of Disinvestments is responsible for a systematic policy approach to disinvestment and privatization of Public Sector undertakings. It is also concerned with the financial policy relating to the utilization of proceeds from disinvestment.

To determine which company is cheaper based on the Growth Adjusted Price to Earnings (PEG) ratio, we need to compare the PEG ratios of both companies. The PEG ratio is calculated by dividing the P/E ratio by the growth rate.

For ABC Ltd:
P/E ratio = 12
Growth rate = 10%

PEG ratio = P/E ratio / Growth rate = 12 / 10% = 1.2

For XYZ Ltd:
P/E ratio = 28
Growth rate = 35%

PEG ratio = P/E ratio / Growth rate = 28 / 35% = 0.8

The PEG ratio reflects the valuation relative to the company's projected growth rate. A lower PEG ratio generally indicates a relatively cheaper valuation.

In this case, ABC Ltd has a PEG ratio of 1.2, while XYZ Ltd has a PEG ratio of 0.8. Comparing the two, XYZ Ltd has a lower PEG ratio, suggesting a relatively cheaper valuation compared to ABC Ltd. This indicates that investors are paying less for each unit of expected growth in XYZ Ltd compared to ABC Ltd.

Unhealthy practice in the securities market includes insider trading. Insider trading involves the illegal use of non-public, price-sensitive information to trade securities. According to SEBI (Prohibition of Insider Trading) Regulations 2015, insiders are prohibited from communicating or providing access to such information to anyone, except in the course of their responsibilities and legal obligations.

FDI is welcomed by developing economies as it brings in new products and services and also brings in new managerial skills, contributing to economic growth and development. Traditional technologies are not the primary focus of FDI.

The depository receipts issued in India and listed on an Indian Stock Exchange with foreign stocks as underlying shares are known as Indian Depository Receipts (IDRs).

Availability of technology-savvy population, institutions driving technology-based initiatives, and technological infrastructure help a country attract investors.

When one invests in equity shares, none of the mentioned options is certain. The quantum of cash flow, timing of cash flow, and amount of capital appreciation are uncertain when investing in equity shares.

If a stock has exceeded its target price, an analyst may recommend selling the stock. The target price is the price at which the analyst believes the investor should sell the stock to realize the most reward.

To calculate the current market price of the company's share, we can use the Price-to-Book Value (P/BV) ratio. The P/BV ratio is given as 8. The Return on Equity (ROE) is 25%, which implies that the Net Income is 25% of the Equity.

Given that the Net Income is Rs 3,00,000, we can calculate the Equity as follows:

Equity = Net Income / ROE
Equity = Rs 3,00,000 / 25%
Equity = Rs 12,00,000

The Book Value can be calculated by dividing the Equity by the Number of Shares. To calculate the Number of Shares, we can use the Earnings Per Share (EPS) of 0.60:

Number of Shares = Net Income / EPS
Number of Shares = Rs 3,00,000 / 0.60
Number of Shares = 5,00,000

Therefore, the Book Value is:

Book Value = Equity / Number of Shares
Book Value = Rs 12,00,000 / 5,00,000
Book Value = Rs 2.40

Finally, we can find the current market price by multiplying the P/BV ratio by the Book Value:

Current Market Price = P/BV × Book Value
Current Market Price = 8 × Rs 2.40
Current Market Price = Rs 19.20

Therefore, the current market price of the company's share is Rs 19.20.

Per Capita Income is the amount of money that is being earned per person in a country. Higher per capita income indicates a higher standard of living.

Research Analysts are responsible for collecting and analyzing data to provide insights and recommendations for investment decisions. They do not directly make investment decisions or manage investments.

The Net Profit margin can be calculated by dividing the Net Profit by the Sales and multiplying by 100 to get a percentage. In this case, since the operating profit is two times the Net Profit, the Sales would be double the operating profit. Given that the operating profit margin is 50%, which means it is 50% of the Sales, we can calculate the Net Profit margin as Net Profit (100) divided by Sales (200) multiplied by 100, resulting in 25%.

When analyzing an economy, an analyst focuses on changes in various macroeconomic factors such as national income, inflation, interest rate, and unemployment rate. They also consider the flows from Foreign Direct Investment (FDI) and Foreign Portfolio Investors (FPIs) and examine savings and investment patterns. All these factors provide valuable insights into the economic health and performance of a country.

Research Analysts provide in-depth knowledge on the status of a company/industry, etc., by studying various macro/micro factors and financial ratios. Based on these, investors can make decisions on buying and selling stocks, etc.

A stock exchange can have its own/different bye-laws, but those bye-laws need to be approved by SEBI.

I apologize for the confusion in my previous response. You are correct. The P/E ratio is calculated by dividing the market price of the stock by the earnings per share (EPS). In this case, since the P/E ratio is given as 20 and the market price of the stock is Rs 340 per share, we can calculate the EPS as follows:

EPS = Market Price of Stock / P/E ratio
EPS = Rs 340 / 20
EPS = Rs 17

So, the earnings per share (EPS) is Rs 17. Thank you for pointing out the error, and I apologize for any confusion caused.

In the given case, the capital employed can be calculated by adding the total equity and total debt.

Capital Employed = Total Equity + Total Debt

Capital Employed = Rs 5,00,000 (net worth) + Rs 3,00,000 (debt)
Capital Employed = Rs 8,00,000

Therefore, the capital employed in the business is Rs 8,00,000. This represents the total funds invested in the company, including both equity and debt.

To calculate the Price-to-Earnings (P/E) Ratio, you divide the market price per share by the Earnings per share (EPS). Let's go through the steps:

1. Calculate the Earnings per Share (EPS):
EPS = PAT / Number of outstanding shares
EPS = Rs 540,000 / 6,000
EPS = Rs 90

2. Calculate the P/E Ratio:
P/E Ratio = Market price per share / EPS
P/E Ratio = Rs 280 / Rs 90
P/E Ratio ≈ 3.11

Therefore, the Price-to-Earnings (P/E) Ratio is approximately 3.11. This indicates that investors are willing to pay 3.11 times the earnings per share for each share of the company.

The Reserve Bank of India (RBI) is not a department of the Ministry of Finance. The Ministry of Finance comprises departments such as the Department of Economic Affairs, Department of Disinvestments, Department of Revenue, Department of Financial Services, and Department of Expenditure.

The stability and growth of a company's dividend track record would be considered under quantitative parameters. Quantitative parameters involve financial aspects such as ratio analysis, cash flow analysis, and dividend history. Qualitative parameters focus on the business/revenue model, SWOT analysis, competition in the industry, and technology aspects. Valuation parameters include intrinsic value, P/E ratio, P/BV ratio, and margin of safety aspects.

Warrants are financial instruments that give the holder the right, but not the obligation, to buy a specific number of common stock shares at a predetermined price (exercise price) within a certain period of time. Warrants entitle an investor to buy common stock shares of the issuer company after a relatively long period of time at a given price. Warrants are typically long-term instruments and provide investors with the potential to profit from the future appreciation of the company's common stock.

Confirmation bias refers to the tendency to search for or interpret information in a way that confirms one's existing beliefs.

To calculate the Earnings per Share (EPS), you divide the Net Profit by the number of shares outstanding. Let's go through the steps:

1. Calculate the Net Profit:
Net Profit = 25% of EBIT
Net Profit = 25% of Rs 450,000
Net Profit = Rs 112,500

2. Calculate the EPS:
EPS = Net Profit / Number of shares
EPS = Rs 112,500 / 30,000
EPS = Rs 7.50

Therefore, the Earnings per Share (EPS) is Rs 7.50. This means that for each share of the company, the earnings attributable to that share is Rs 7.50.

To prevent the misuse of confidential information, a "Chinese Wall" policy is implemented in firms. This policy separates the areas that have access to confidential information (insider areas) from the areas dealing with sales, marketing, investment advice, and other public-facing departments. Employees in the insider areas are prohibited from sharing price-sensitive information with anyone in the public areas.

The analysis done from the perspective of a business looking to set up a unit offshore and analyzing several countries to choose from is known as PESTLE Analysis. PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal, and Environmental Analysis. It helps a business understand each of these factors and how changes in them can impact the business.

Investment advisers consider various factors when working with investors. They take into account the investors' time horizon for investments, their specific needs and goals, and their ability to bear risk. Based on these factors, investment advisers provide guidance on asset allocation and help investors make suitable choices of investments that align with their objectives.

The Department of Economic Affairs is the nodal agency of the Central Government in India responsible for formulating and monitoring macroeconomic policies. This department oversees monetary and fiscal policy, as well as the functioning of the capital market, including stock exchanges.

CAGR stands for Compounded Annual Growth Rate. It represents the average annual growth rate of an investment over a specified period. CAGR is calculated by taking the geometric mean of the annual returns over the holding period. It provides a smoothed measure of growth, but it does not consider the timings of cash flows into account. Therefore, all of the given options are true for CAGR.

Return on Capital Employed (ROCE) is calculated by dividing EBIT (Earnings Before Interest and Taxes) by the Capital Employed. Capital Employed can be calculated as Total Assets minus Current Liabilities or as Total Equity plus Total Debt.

The Efficient Market Hypothesis (EMH) states that share prices incorporate and reflect all relevant information.

The Code of Conduct for Research Analysts is defined in Schedule III of the Research Analyst Regulations.

Let's go through the calculation again.

If the sales are Rs. 100, and the sales are 200% of the operating profit, we can calculate the operating profit as follows:

Operating profit = (Sales * 100) / Sales %
Operating profit = (100 * 100) / 200
Operating profit = 50

Now, you mentioned that the net profit is one-fourth of the sales, which would be Rs. 25. However, we need to calculate the net profit as a percentage of the operating profit. So the correct calculation would be:

Net profit % of operating profit = (Net profit / Operating profit) * 100
Net profit % of operating profit = (25 / 50) * 100
Net profit % of operating profit = 50%

Therefore, the net profit as a percentage of the operating profit is 50%.

If the expected rate of return by investors is the same as the coupon rate, the bond's value will be equal to its face value. If the expected rate of return is higher or lower than the coupon rate, the bond's value will be less than or greater than its face value, respectively. The valuation of bonds is based on present and future value computations.

In an industry with high rivalry, the intense competition among companies leads to lower pricing power as they engage in price wars to gain market share. This results in lower incomes for the industry participants as they have to compromise on profit margins to stay competitive. Therefore, option b is the correct answer.

Free cash flows to the firm (FCFF) are computed as EBIT (Earnings Before Interest and Taxes) minus Taxes plus Depreciation and Non-cash charges minus the Increase or Decrease in working capital and minus the Capital Expenditure Incurred (Sale of assets).

Publicly known information is not considered an unfair trade practice. Unfair trade practices include wilful misrepresentation, suggestions as untrue, active concealment of facts, false promises, and reckless representations, among others.

To calculate the sales based on the given information, we can follow these steps:

Step 1: Calculate the Net Profit.
- Given that Net Profit = EPS x No. of Shares.
- Net Profit = Rs. 5 x 50,000 = Rs. 2,50,000.

Step 2: Calculate EBIT.
- Given that EBIT is 400% of Net Profit.
- EBIT = Rs. 2,50,000 x 400 / 100 = Rs. 10,00,000.

Step 3: Calculate Sales.
- Given that EBIT is 40% of Sales.
- Rearranging the formula, Sales = EBIT x 100 / 40.
- Sales = Rs. 10,00,000 x 100 / 40 = Rs. 25,00,000.

Therefore, based on the given information, the sales amount is calculated to be Rs. 25,00,000. This represents the total sales generated by the company based on the given Net Profit and EBIT percentages.

To calculate the Equity to Asset Ratio, you divide the equity by the total assets. Let's go through the steps:

1. Calculate the Equity:
Equity = Total Assets - Total Liabilities
Equity = Rs 35,000 - Rs 18,000
Equity = Rs 17,000

2. Calculate the Equity to Asset Ratio:
Equity to Asset Ratio = Equity / Total Assets
Equity to Asset Ratio = Rs 17,000 / Rs 35,000
Equity to Asset Ratio ≈ 0.4857 (rounded to four decimal places)

Therefore, the Equity to Asset Ratio is approximately 0.4857 or 48.57%. This indicates that equity represents around 48.57% of the total assets of the company.

Markets usually give fair pricing to securities. When a security is underpriced, an investor can buy it and sell it when it's fairly priced. If a security is overpriced, the only way to benefit is to sell it and buy it back when it's fairly priced, which is short selling and not suitable for regular investors.

Some companies outperform others in an industry due to their unique ways of mitigating risks and maximizing returns, having a unique value proposition that differentiates them, and having unique selling points that attract customers. Therefore, all of the above options are correct.

To calculate the net profit margin of the company, we can follow these steps:

Step 1: Calculate the Net Profit
Net Profit = Operating Profit - (Operating Profit * Tax Rate)
Net Profit = Rs 3900 - (Rs 3900 * 0.30)
Net Profit = Rs 3900 - Rs 1170
Net Profit = Rs 2730

Step 2: Calculate the Net Profit Margin
Net Profit Margin = (Net Profit / Sales) * 100
Net Profit Margin = (Rs 2730 / Rs 28000) * 100

Using a calculator, we can evaluate this expression:

Net Profit Margin = (2730 / 28000) * 100
Net Profit Margin ≈ 9.75%

Therefore, the net profit margin of the company is approximately 9.75%. This means that for every Rs 100 of sales, the company retains approximately Rs 9.75 as net profit after deducting operating expenses and taxes.

When a company declares a dividend in between a financial year, it is referred to as an interim dividend. A final dividend, on the other hand, is announced at the end of the year.

To calculate the Return on Equity (ROE) based on the given information, we can follow these steps:

Step 1: Calculate the Earnings Per Share (EPS).
- Given that EPS = Stock Price / PE.
- EPS = Rs. 48 / 8 = Rs. 6.

Step 2: Calculate the Book Value.
- Given that Stock Price = Price to Book Value × Book Value.
- Rearranging the formula, Book Value = Stock Price / Price to Book Value.
- Book Value = Rs. 48 / 4 = Rs. 12.

Step 3: Calculate the Return on Equity.
- Given that ROE = (EPS / Book Value) × 100.
- ROE = (Rs. 6 / Rs. 12) × 100 = 50%.

Therefore, based on the given information, the Return on Equity (ROE) is calculated to be 50%. This represents the profitability of the company relative to its book value per share.

The Price to Earnings Ratio or PE Ratio measures the price that the market is willing to pay for the earnings of a company. If the PE ratio of a stock is higher compared to its peer group companies, it suggests that investors are willing to pay a higher price for each unit of earnings. Hence, the stock is considered as expensive.

SEBI does not directly develop and administer certification exams. The responsibility of conducting certification exams has been entrusted to NISM (National Institute of Securities Markets).

Corporate actions such as stock splits, bonus issues, and stock consolidations can impact per share data. In the case of bonus shares, the per share data, including earnings per share, book value per share, and market price per share, will experience immediate deterioration as the total number of shares increases without any economic change in the profit and loss statement or balance sheet. The same is the case with stock splits. In stock consolidations, as the total number of shares decreases without any economic change in the profit and loss account or balance sheet, per share data witnesses immediate improvement.

Less competition in an industry makes it more attractive for investors/owners. If an industry has barriers to entry that deter new competitors from entering the market, existing companies can potentially enjoy higher profits and market share. Therefore, the statement is true.

Per share data (earning per share, book value per share, market price per share, etc.) witness immediate deterioration in the case of both a bonus issue and a stock split. In a bonus issue, the total number of shares increases without any economic change in the company's financials, leading to a dilution of per share metrics. Similarly, in a stock split, the total number of shares increases, causing a reduction in per share metrics.

The growth rate can be calculated as the product of the retention rate and the return on equity. The retention rate represents the portion of earnings that the company retains, rather than distributing as dividends. Return on equity measures the profitability of a company's equity investment. Multiplying these two factors gives the growth rate, indicating how much the company is growing its equity through retained earnings.

While careful analysis of historical financials is essential for valuation and quantitative analysis, it is not a primary requirement for qualitative analysis. Qualitative analysis focuses on aspects like business/revenue models, SWOT analysis, competition, and technology.

The Dividend Payout Ratio can be calculated using both formulas. The first formula divides the company's dividend per share by earnings per share, while the second formula divides the company's total dividend by net profit. Both formulas provide a measure of how much of the company's earnings are being distributed to shareholders in the form of dividends. Hence, both options 1 and 2 are correct.

Trading members or Stock Brokers are registered members of a Stock Exchange. They facilitate buy and sell transactions of investors on stock exchanges.

Yes, you are correct. The Price-to-Earnings (P/E) ratio is indeed calculated by dividing the current stock price by the earnings per share (EPS). In this case, if the current stock price is Rs 180 and the last reported EPS is Rs 10, then the P/E ratio can be calculated as:

P/E ratio = Current stock price / EPS
P/E ratio = Rs 180 / Rs 10
P/E ratio = 18

So the P/E ratio in this case is 18.

Stock split does not lead to any increase in the wealth of shareholders. A stock split is a process of dividing existing shares into multiple shares, which reduces the face value of each share while increasing the number of shares. It aims to increase liquidity by making shares more affordable. However, the increase or decrease in the wealth of shareholders depends on the stock prices and other factors affecting the market value of the shares.