Research Analyst – Feel Real Exam – 4

Brand loyalty, good service, and good quality products can suspend the price-value thought from the minds of customers. This means that if customers are loyal to a brand, satisfied with the service, or perceive the product's quality to be excellent, they may not focus solely on the price and prioritize other factors. Hence, all the options listed in the question are correct.

Scheme of arrangement is a court-monitored settlement process between the company and its creditors or members. It typically involves the reorganization of the share capital of the company. The National Company Law Tribunal (NCLT) is responsible for overseeing and managing the scheme of arrangement. The person claiming the scheme of arrangement shall approach the NCLT, which then orders a meeting between the company, its creditors, and/or members to arrive at a compromise or arrangement. Therefore, the National Company Law Tribunal.

In technical analysis, the price level at which the stock tends to find resistance and is more likely to go down rather than break through is called the resistance level. It is considered the likely peak point in the stock's price movement. On the other hand, support levels are where the price tends to find support as it is going down and is more likely to bounce up from those levels. Therefore, Resistance.

The general increase in price levels of goods and services in the economy is known as inflation. Inflation leads to a decrease in the purchasing power of money as the prices of goods and services rise over time. Therefore, option a, inflation, is the correct answer.

The statement is False. The balance of payments statement consists of the current account and the capital account. If imports exceed exports, it leads to a current account deficit, not a capital account deficit. The current account tracks transactions related to goods, services, income, and current transfers, while the capital account records capital flows like investments, loans, and grants. Therefore, False.

The portion of earnings paid to the shareholders by companies is called Cash Dividend. When a company announces a dividend, cash dividends are given to shareholders in the form of cash (e.g., bank transfer). Stock dividends or bonus issues refer to additional shares given to shareholders in proportion to their holdings by capitalizing revenue reserves. Therefore, Cash Dividend.

As per Regulation 16 of the Code of Conduct for Research Analysts, independent research analysts, individuals employed as research analysts by research entities, or their associates shall not deal or trade directly or indirectly in securities that they review in a manner contrary to their given recommendations. Therefore, that research analysts shall not trade in the stocks that they have reviewed in a manner contrary to their recommendations.

The Department of Financial Services administers government policies related to public sector banks, life and general insurance, and pension reforms. It is responsible for overseeing and regulating these sectors, formulating policies, and ensuring their effective implementation. The Department of Revenue handles taxation-related matters, the Department of Expenditure deals with government spending, and the Department of Economic Affairs focuses on broader economic policies and planning. Therefore, The Department of Financial Services.

Every industry typically goes through various stages like Pioneering stage, Growth stage, Matured stage, etc. In the Pioneering stage, the industry is just taking shape. It is not widely adopted, and the concept is still being proven or has just been proven. Block Chain technology is currently a new industry, and the concept is yet to be widely accepted. Therefore, Block Chain Technology.

To calculate the net profit margin using the given information, we can follow these steps:

Step 1: Determine the operating profit.
- Given that the operating profit is Rs. 100.

Step 2: Calculate the sales.
- Given that sales are 200% of the operating profit.
- Sales = Operating Profit x 200%
- Sales = Rs. 100 x 200%
- Sales = Rs. 200

Step 3: Determine the net profit.
- Given that the operating profit is 400% of the net profit.
- Net Profit = 1/4 of the operating profit.
- Net Profit = Rs. 100 / 4
- Net Profit = Rs. 25

Step 4: Calculate the net profit margin.
- Net Profit Margin = (Net Profit / Sales) x 100
- Substituting the values, we get:
Net Profit Margin = (Rs. 25 / Rs. 200) x 100
Net Profit Margin = 12.5%

Therefore, the net profit margin, based on the given information, is 12.5%. This represents the percentage of sales that converts into net profit, indicating the profitability of the company.

The statement of cash flows categorizes cash inflows and outflows into three main sections: operating cash flows, investing cash flows, and financing cash flows. Operating cash flows include cash flows from business operations, while investing cash flows cover cash flows related to assets. Financing cash flows, on the other hand, deal with cash flows related to liabilities. To know the amount of funds a company has borrowed during the preceding financial year, the best source of information would be the financing cash flows section. It provides insights into the borrowing activities of the company, including debt issuances and repayments. Therefore, Financing cash flows.

According to SEBI rules, the chairman of the Remuneration Committee should be an independent director. The remuneration committee is responsible for deciding the remuneration of directors and senior management. Having an independent director as the chairman ensures objectivity and transparency in the decision-making process. Therefore, An Independent Director.

In order to follow an expansionary fiscal policy and boost demand in an economy, a government requires sufficient funds to invest. A low fiscal deficit indicates that the government has enough money to inject into the economy without relying heavily on borrowing. Therefore, a low fiscal deficit is most likely to help a government in following an expansionary fiscal policy.

Annual Reports are an authentic source to verify the facts of a company as they are published by the company itself and the accounts are certified by Chartered Accountants. Therefore, Annual Reports.

In Puttable Bonds, the issuers of the bonds do not have the right to call the bonds back.

A puttable bond is a debt instrument that gives bondholders the right to demand early repayment of the principal from the issuer. This means that the bondholders, not the issuers, have the right to exercise the put option and sell the bond back to the issuer at a predetermined price. On the other hand, a callable bond allows the issuer to redeem the bond before its maturity date. Therefore, the statement is false, and False.

As per SCP analysis, FMCG is a round-the-year business and not a seasonal business. SCP analysis looks at the industry structure, conduct, and performance. FMCG (Fast Moving Consumer Goods) is typically a round-the-year business, meaning it operates consistently throughout the year rather than being heavily dependent on specific seasons. Therefore, False.

During a recession, the industry most likely to be affected the most is the Airlines industry. Economic recessions often result in decreased income levels, unemployment, and a decline in consumption. As a result, fewer people can afford to travel by air, leading to reduced profitability for the Airlines industry. Therefore, Airlines.

The Growth adjusted Price to Earnings Ratio (PEG Ratio) is calculated by dividing the current price of a stock by its earnings per share and then dividing it by the growth rate. This ratio helps assess the stock's valuation relative to its growth prospects. By comparing the PEG ratios of different stocks, investors can identify stocks that may be undervalued or overvalued based on their growth rates. Therefore, [Current price of stock/ Earnings Per Share] / Growth rate.

The manager of the Indian Government's borrowing program is the Reserve Bank of India (RBI). The RBI is the central bank of the country and has the responsibility of administering the monetary policy and regulating the money markets. In addition, it manages the government's borrowing programs by issuing government securities and conducting auctions to raise funds for the government. Therefore, RBI.

As per SEBI (Research Analyst) Regulation 18, the research analyst or research entity should not issue a research report that is not consistent with the views of the individuals employed as research analysts regarding a subject company. Therefore, The individual research analyst publishing the report.

The price to book value ratio is calculated by dividing the market capitalization by the book value of equity or net worth. A lower price to book value ratio suggests that the assets are available at a cheaper price compared to their book value. It indicates that investors are paying less to buy each rupee of book value of equity. Hence, option b, "The assets are cheap," is the correct answer.

Different industries face different challenges and opportunities. Their growth drivers could be significantly different. Accordingly, research analysts need to thoroughly understand the regulatory environment prevalent in the industry, business models, competition, operating factors, sensitivity of demand to price changes, consumers' behavior, and more. Therefore, All of the above.

The SEBI Act empowers the Securities and Exchange Board of India (SEBI) to take various actions to regulate and supervise the securities markets. These actions include impounding and retaining the proceeds or securities in violation of SEBI regulations, suspending office bearers of SEBI registered intermediaries, and suspending trading in a security listed on a stock exchange. However, the appointment of the Director of Financial Intelligence Unit is not within the purview of SEBI's powers. The Director of Financial Intelligence Unit is appointed by the Central Government. Therefore, Appointment of Director of Financial Intelligence Unit.

When Foreign Financial Institutions (FIIs) withdraw their investments from an economy, it creates systematic risk. Systematic risk refers to risks that affect the entire investment market and cannot be eliminated through diversification. The withdrawal of FIIs' money impacts the entire spectrum of investments, causing a decline in the overall market. Therefore, option b, systematic risk, is the correct answer.

The cost of equity is used as the discount rate while calculating the Free Cash Flow to Equity (FCFE). FCFE represents the cash flows available to equity shareholders after accounting for necessary investments in the business. Therefore, the cost of equity.

Per capita income is the average income earned by each individual in the economy and is calculated by dividing the national income by the total population. Therefore, National Income / Total population.

To calculate the earning yield, we follow these steps:

Step 1: Determine the earnings per share (EPS).
- Given that the last dividend on a share with a face value of Rs. 5 and a dividend payout ratio of 60% is Rs. 1 (which is 20% of Rs. 5), we can calculate the EPS as follows:
EPS = Dividend / Dividend Payout Ratio
EPS = Rs. 1 / 0.6
EPS ≈ Rs. 1.66

Step 2: Find the stock price per share.
- The problem doesn't provide a specific stock price, so we'll assume a stock price of Rs. 90 for this example.

Step 3: Calculate the earning yield.
- Earning Yield = (EPS / Stock Price) x 100
- Substituting the values, we get:
Earning Yield = (Rs. 1.66 / Rs. 90) x 100
Earning Yield ≈ 1.84%

Therefore, the earning yield, based on the given information, is approximately 1.84%. This means that for every Rs. 100 invested in the stock, you can expect to earn around Rs. 1.84 as a return.

An income statement, also known as a profit and loss statement, includes various items such as revenue, expenses, and net income. Among the given options, the cost of goods sold is a component of the income statement. It represents the cost incurred by a company to produce the goods or services sold during a particular period. Therefore, Cost of goods sold.

The value of equity is calculated by discounting the free cash flows for equity (FCFE) using the cost of equity. FCFE represents the cash flows available to equity shareholders after all expenses, reinvestments, and debt-related payments. By discounting these cash flows using the cost of equity, we can determine the present value of equity. Therefore, option d is the correct answer.

Beta measures the volatility or systematic risk of a stock in relation to the overall market. A beta greater than 1 indicates that the stock tends to be more volatile or risky than the market. This means that the stock's price is expected to fluctuate to a greater extent than the overall market, both on the upside and downside.

For example, if a stock has a beta of 1.2, it is theoretically 20% more volatile than the market. This means that if the market moves up by 1%, the stock would be expected to move up by approximately 1.2%. Conversely, if the market moves down by 1%, the stock would be expected to move down by approximately 1.2%.

Investors often use beta as a measure of risk when assessing investment opportunities. A higher beta indicates potentially higher returns but also higher volatility, while a lower beta suggests lower volatility but potentially lower returns compared to the overall market.

When central banks shift from a contractionary policy to an expansionary policy, it typically involves increasing the money supply and reducing interest rates. These measures are intended to stimulate economic growth. As a result, the stock markets are more likely to go up as investors anticipate increased liquidity and lower borrowing costs, which can boost stock prices. Therefore, Stock markets are likely to go up.

Return on Capital Employed is similar to Return on Equity. Return on Equity = (Dividend Per Share / Book Value) x 100. In this case, the calculation would be (5 / 20) x 100 = 25%. Therefore, 25%.

or

To calculate the Return on Capital Employed (ROCE) in the business, we need the earnings before interest and taxes (EBIT) and the capital employed.

Given information:
- Paid-up capital: Rs 5,00,000
- Face value per share: Rs 10
- Book value per share: Rs 20
- Dividend per share: Rs 5

Step 1: Calculate the number of shares
Number of shares = Paid-up capital / Face value per share
Number of shares = Rs 5,00,000 / Rs 10
Number of shares = 50,000

Step 2: Calculate the capital employed
Capital employed = Number of shares x Book value per share
Capital employed = 50,000 x Rs 20
Capital employed = Rs 10,00,000

Step 3: Calculate the EBIT (earnings before interest and taxes)
EBIT = Dividend per share x Number of shares
EBIT = Rs 5 x 50,000
EBIT = Rs 2,50,000

Step 4: Calculate the Return on Capital Employed (ROCE)
ROCE = (EBIT / Capital employed) x 100
ROCE = (Rs 2,50,000 / Rs 10,00,000) x 100
ROCE = 0.25 x 100
ROCE = 25%

Therefore, the Return on Capital Employed (ROCE) in the business is 25%.

Expansionary fiscal policy refers to a situation where the government's spending exceeds its income. This policy stance is typically adopted during periods of recessions or when the economy is growing slowly. By increasing government spending, it aims to stimulate economic growth and increase aggregate demand. Therefore, The Government's spending exceeds its income.

To calculate the enterprise value (EV) using the given information, we can follow these steps:

Step 1: Determine the market value of equity (market capitalization).
- Given that the market value of equity is Rs. 1,00,000.

Step 2: Determine the market value of debt.
- Given that the market value of debt is Rs. 30,000.

Step 3: Determine the cash and cash equivalents.
- Given that the cash and cash equivalents are Rs. 5000.

Step 4: Calculate the enterprise value.
- Enterprise Value = Market value of equity + Market value of debt - Cash and cash equivalents
- Substituting the values, we get:
Enterprise Value = Rs. 1,00,000 + Rs. 30,000 - Rs. 5000
Enterprise Value = Rs. 1,25,000

Therefore, the enterprise value, based on the given information, is Rs. 1,25,000. This represents the total value of a company, including its equity, debt, and cash and cash equivalents.

Research Analysts play a crucial role in studying companies and industries, analyzing raw data, and making forecasts. They also provide recommendations to investors regarding whether to buy, hold, or sell securities based on their analysis. Therefore, both options 1 and 2 are correct.

Gold as an asset generally generates only one-time cash inflow when it is sold. In the case of equity and bonds, there are regular inflows in the form of dividends and interest, along with the final inflow when they are sold. Therefore, gold.

A good management will give a comprehensive view of the future prospects of the company to the research analysts, including the future financial prospects, challenges and opportunities faced by the company, and the future performance of the company's stock in the stock market. This approach aims to positively influence the analysts' sentiments and provide them with a holistic understanding of the company's outlook. Therefore, All of the above.

Delisting of shares refers to the permanent removal of the shares of a company from being listed on a stock exchange. Delisting may be compulsory or voluntary. In a compulsory delisting, the shares are delisted due to non-compliance with regulations and the clauses of the listing agreement by the company. In a voluntary delisting, the company chooses to get the shares delisted and go private. Therefore, True.

The value of equity is calculated by discounting the free cash flows for equity (FCFE) using the cost of equity. FCFE represents the cash flows available to equity shareholders after accounting for necessary investments in the business. Therefore, Free cash flows for equity (FCFE) is discounted using the cost of equity.

In this case, where the fair value of ABC Ltd. shares is lower than the current market price, all of the above options are appropriate ways to express this in a research report. The analyst may recommend investors to not consider buying the stock as it is overvalued, assign an 'underweight' rating on the stock, and strongly recommend selling the stock for existing investors. Hence, All of the above.

A company research report typically includes various sections such as company fundamentals, key strengths and key concerns, and the shareholding pattern. These sections provide comprehensive information about the company, its financials, performance, strengths, concerns, and the distribution of ownership among shareholders. Therefore, all of the options listed in the question form a part of a company research report.

To calculate the total market size using the given information, we can follow these steps:

Step 1: Determine the combined revenue of the three major players.
- Given that the combined revenue of the three major players is Rs. 1,500 crores.

Step 2: Determine the market share of the three major players.
- Given that their market share is 60%.

Step 3: Calculate the total market size.
- Total Market Size = Combined Revenue / Market Share
- Total Market Size = Rs. 1,500 crores / 60%
- Total Market Size = Rs. 2,500 crores

Therefore, based on the given information, the total market size is calculated to be Rs. 2,500 crores. This represents the estimated value of the entire market, considering the revenue and market share of the three major players.

To calculate the debt level using the given information, we can follow these steps:

Step 1: Calculate the Capital Employed.
- Given that the ROCE (Return on Capital Employed) is 40%, and the EBIT (Earnings Before Interest and Taxes) is Rs. 4,00,000, we can use the formula:
ROCE = EBIT / Capital Employed
Rearranging the formula, we find:
Capital Employed = EBIT / ROCE
Capital Employed = Rs. 4,00,000 / 0.4
Capital Employed = Rs. 10,00,000

Step 2: Calculate the Share Equity.
- Given that the ROE (Return on Equity) is 25%, and the Net Profit is Rs. 2,00,000, we can use the formula:
ROE = Net Profit / Share Equity
Rearranging the formula, we find:
Share Equity = Net Profit / ROE
Share Equity = Rs. 2,00,000 / 0.25
Share Equity = Rs. 8,00,000

Step 3: Calculate the debt level.
- Debt Level = Total Capital Employed - Share Equity
- Substituting the values, we get:
Debt Level = Rs. 10,00,000 - Rs. 8,00,000
Debt Level = Rs. 2,00,000

Therefore, the debt level, based on the given information, is Rs. 2,00,000. This represents the difference between the total capital employed and the share equity of the company.

Among the given options, venture capital funds have the highest uncertainty in terms of returns. Venture capital funds invest in early-stage companies with high growth potential but also carry a higher risk of failure. These investments have a longer gestation period and a higher likelihood of not yielding returns. However, if a venture capital investment is successful, the returns can be substantial. Therefore, due to the higher risk and potential for high returns, venture capital funds have the highest uncertainty in terms of returns.

According to the BCG matrix, a business segment that is in a fast-growing market but has a low market share is known as "Question Marks." These segments require further analysis and consideration to determine whether they have the potential to become stars or may decline and become dogs. Therefore, Question Marks.

In options trading, the buyer has the right but not the obligation, while the writer (seller) has the obligation. A Call Writer is potentially obligated to sell an asset at a predetermined price to the Call Buyer. Therefore, Call Writer.

The Structure Conduct Performance (SCP) Analysis is a model used to analyze industries by considering their structure, conduct, and performance. It examines factors such as industry concentration, market behavior, and the resulting performance indicators. This approach provides a comprehensive understanding of the dynamics within an industry. Therefore, option b, Structure Conduct Performance (SCP) Analysis, is the correct answer.

The Price to Book Value Ratio is calculated by dividing the market capitalization by the net worth of the company.

In this case, the calculation would be:

Price to Book Value Ratio = Market Capitalization / Net Worth = Rs. 600,000 / Rs. 300,000 = 2

Therefore, the correct Price to Book Value Ratio for the company is 2.

An income statement (also known as a profit and loss statement) includes various items related to a company's revenues, expenses, gains, and losses. Depreciation and amortisation are expenses that are included in the income statement. They represent the gradual reduction in value of assets and the write-off of intangible assets over their useful life, respectively. Accounts receivable, current assets, current liabilities, and long-term debt are items typically found in the balance sheet, not the income statement. Therefore, Depreciation and Amortisation.

According to SEBI standards of corporate governance, if the chairman of the board is a non-executive director, then at least one-third (33%) of the board should be comprised of independent directors. However, if the chairman is an executive director, then at least 50% of the board should be independent directors. Therefore, at least 33%.

Passive investing involves investing in a broad set of securities that fairly represent the asset class the investor needs to invest. Typically, passive investing strategy follows an indexing strategy where an investor buys all securities that are part of an index. The objective of a passive investor is to earn the rate of return that the selected asset class provides. A passive investor does not decide upon individual securities to buy or sell but rather their analysis is limited to the broader asset class. Therefore, Passive Investing means investing in a broad set of securities that represent an asset class.

To calculate the dividend yield, we can follow these steps:

Step 1: Determine the dividend received per share.
- Given that the company declares a 300% dividend on the face value of Rs. 2, we can calculate the dividend per share as follows:
Dividend per share = Face value of share x Dividend percentage
Dividend per share = Rs. 2 x 300% = Rs. 6

Step 2: Calculate the total dividend received.
- Since the total number of shares is not provided in the problem, we'll assume it to be 100 for this example.
Total dividend received = Dividend per share x Number of shares
Total dividend received = Rs. 6 x 100 = Rs. 600

Step 3: Determine the amount invested.
- Given that the amount invested is Rs. 10,000.

Step 4: Calculate the dividend yield.
- Dividend Yield = (Total dividend received / Amount invested) x 100
- Substituting the values, we get:
Dividend Yield = (Rs. 600 / Rs. 10,000) x 100
Dividend Yield = 6%

Therefore, the dividend yield, based on the given information, is 6%. This means that for every Rs. 10,000 invested, you can expect to receive Rs. 600 as dividends, representing a 6% return on your investment.

While factors such as interest rates, inflation, and market conditions can indirectly influence investment returns, the primary factor that determines earnings for an investor from a business is the performance of the company. The success and profitability of the company directly impact the dividends, capital gains, or other returns that the investor receives. Therefore, Performance of the company.

A fundamental research analyst studies the economy, the industry, and the company. Macro-economic fundamentals include topics that affect an economy at-large, including statistics regarding unemployment, supply and demand, growth, inflation, as well as considerations for monetary or fiscal policy and international trade. Therefore, Macro-economic fundamentals.

To calculate the future value of an investment using the given information, we can follow these steps:

Step 1: Determine the present value (PV).
- Given that the present value is Rs. 30,000.

Step 2: Identify the annual interest rate (r).
- Given that the annual interest rate is 8%, which is equivalent to 0.08 as a decimal.

Step 3: Determine the number of years (n).
- Given that the number of years is 5.

Step 4: Calculate the future value (FV).
- FV = PV * (1 + r)^n
- Substituting the values, we get:
FV = Rs. 30,000 * (1 + 0.08)^5
FV = Rs. 30,000 * 1.4693
FV ≈ Rs. 44,079

Therefore, the future value of the investment, based on the given information, is approximately Rs. 44,079. This represents the expected value of the investment after 5 years, taking into account the present value and the annual interest rate.

To calculate net sales by deducting indirect taxes from gross sales, we can follow these steps:

Step 1: Determine the gross sales.
- Given that the gross sales are Rs. 1,00,000.

Step 2: Determine the indirect taxes.
- Given that the indirect taxes, such as GST, are Rs. 15,000.

Step 3: Calculate net sales.
- Net Sales = Gross Sales - Indirect Taxes
- Net Sales = Rs. 1,00,000 - Rs. 15,000
- Net Sales = Rs. 85,000

Therefore, based on the given information, the net sales would be Rs. 85,000. This represents the sales revenue after deducting the indirect taxes from the gross sales. It's important to note that direct taxes, such as income tax, are not considered in the calculation of net sales.

The Reserve Bank of India (RBI) has multiple functions. It serves as the regulator and supervisor of the financial and banking system, ensuring the stability and integrity of the monetary and financial system. It also manages foreign exchange reserves and acts as the issuer of currency,

The Ministry of Finance (MoF) handles issues related to taxation, financial legislation, financial institutions, capital markets, state finances, and the Union Budget. Under the MoF, the Department of Financial Services covers banks, insurance, financial services provided by various government agencies and private corporations, pension reforms, and industrial finance and micro, small, and medium enterprises. Therefore, The Department of Financial Services.

To calculate the cost of equity using the given information, we can follow these steps:

Step 1: Determine the risk-free rate.
- Given that the risk-free rate is 5%.

Step 2: Identify the beta.
- Given that the beta is 0.60.

Step 3: Determine the market risk premium.
- Given that the market risk premium is 8%.

Step 4: Calculate the cost of equity.
- Cost of Equity = Risk-Free Rate + Beta * (Market Risk Premium)
- Substituting the values, we get:
Cost of Equity = 5% + 0.60 * 8%
Cost of Equity = 5% + 4.8%
Cost of Equity = 9.8%

Therefore, the cost of equity, based on the given information, is 9.8%. This represents the expected return required by investors for investing in the company's equity, taking into account the risk-free rate, beta, and market risk premium.

Economic recovery from recessionary conditions is contributed by low inflation. During the recovery phase, a low inflation rate enables central banks to loosen their monetary policy and extend liquidity in the market. With relatively easy availability of money and decrease in prices, consumers start buying goods and services, resulting in economic activity picking up and eventually returning to the expansionary phase. Therefore, Low inflation.

National income can be measured using three methods: Product Method, Income Method, and Expenditure Method. The Income Method measures national income as the aggregate income of individuals in the economy. It takes into account factors such as wages, salaries, profits, rent, and interest earned by individuals and businesses. Therefore, Income Method.

To calculate the sales of a business using the given information, let's go through the steps:

Step 1: Calculate the net profit.
- Given that the dividend payout ratio is 40%.
- Net Profit = (Dividend / Dividend Payout Ratio) x 100
- Net Profit = (Rs. 2 / 40%) x 100
- Net Profit = Rs. 5,000

Step 2: Calculate EBITDA.
- Given that the net profit is 20% of EBITDA.
- EBITDA = (Net Profit / Net Profit Margin) x 100
- EBITDA = (Rs. 5,000 / 20%) x 100
- EBITDA = Rs. 25,000

Step 3: Calculate sales.
- Given that EBITDA is 40% of sales.
- Sales = (EBITDA / EBITDA Margin) x 100
- Sales = (Rs. 25,000 / 40%) x 100
- Sales = Rs. 62,500

Therefore, based on the given information, the sales of the business would be Rs. 62,500. It is important to note that there might be additional factors to consider, and these calculations are based on the provided percentages and formulas.

Low consumer confidence is typically observed during a recession. During a recession, economic activity slows down, businesses may cut down on expansion plans, leading to layoffs and decreased income levels. This, in turn, results in a decrease in consumption as consumers become more cautious with their spending. Low consumer confidence is characterized by increased saving and decreased borrowing and spending. Therefore, Recession.

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

Step 1: Determine the number of shares.
- Given that the market capitalization divided by the market price of the share gives the number of shares.
- Number of shares = Market capitalization / Market price per share.
- Number of shares = Rs. 700,000 / Rs. 35.
- Number of shares = 20,000.

Step 2: Determine the net worth of the company.
- Given that the net worth is the book value per share multiplied by the number of shares.
- Net worth = Book value per share * Number of shares.
- Net worth = Rs. 24 * 20,000.
- Net worth = Rs. 4,80,000.

Therefore, based on the given information, Rs. 4,80,000. This represents the net worth of the company, calculated by multiplying the book value per share by the number of shares.

The Price to Earnings Ratio (P/E Ratio) measures the price that the market is willing to pay for the earnings of a company. It is computed as the market price per share divided by the earnings per share. If the P/E ratio of a stock is lower compared to its peer group companies, it is considered to be cheaply priced. A low P/E ratio suggests that investors are paying less for each unit of earnings, indicating a potentially attractive investment opportunity. Therefore, Cheap.

A rights issue, which is an offer of additional shares to existing shareholders, is open for subscription for a maximum period of 30 days. This timeframe allows shareholders sufficient time to make their investment decisions and exercise their rights to subscribe to the new shares. Therefore, 30.

Strengths in SWOT analysis refer to internal capabilities of the company that allow it to exploit external opportunities and withstand threats. The strong financial position of the company is an internal strength. Growing economy and falling interest rates are external factors. Therefore, Strong financial position of the company.

In technical analysis, the support level is a price point at which buying support is expected due to historical price patterns. If the price of a share breaks its support level due to high selling pressure, it is likely to fall further until it reaches the next level of support. Therefore, that the price is likely to fall more till it reaches the next level of support.

As per Regulation 8 of SEBI (Research Analyst) Regulations, corporate entities desiring to get registered with SEBI as Research Analysts must have a minimum net worth of not less than twenty-five lakh rupees (Rs. 25 Lakhs).

Herd mentality bias is when investors look for evidence of other investors buying specific securities. This bias is an outcome of uncertainty and a belief that others may have better information, leading investors to follow the investment choices that others make. Small investors often watch other participants for confirmation and end up entering the market when it is overheated and poised for correction. Therefore, Herd mentality.

When the price of an asset exceeds its fair value, it is considered overpriced. Fair value represents the intrinsic value or true worth of an asset based on various factors and calculations. Therefore, overpriced.

All of the mentioned factors can hamper the work of a research analyst. Contradiction in data from multiple sources can create confusion and make it challenging to derive accurate conclusions. A heap of unnecessary information can lead to information overload and make it difficult to extract relevant insights. Inaccessibility of information can pose a significant obstacle to conducting thorough research. Therefore, All of the above.

According to Michael Porter's Five Forces Model, the bargaining power of suppliers is high when all the mentioned conditions are met. If there are a limited number of suppliers while buyers are many, if suppliers provide critical inputs to buyers, and if switching costs for customers are high, then suppliers have more leverage in negotiations and can exert greater control over prices and terms. Therefore, all of the options listed in the question contribute to high bargaining power of suppliers.

CASA deposits, which include current account and savings account deposits, are crucial factors when analyzing and examining banks. These low-cost deposits contribute to a bank's profitability because they provide a stable and low-cost source of funds that can be utilized for lending and generating higher profits. Therefore, the statement is true.

In SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), a threat refers to a risk that comes from the external environment. The dire financial condition of the company, no succession planning, and expiring patents are internal weaknesses. However, the social pressure that may lead the government to ban the company's products is an external threat to the company. Therefore, Social pressure due to which the Government can ban the company's products.

To calculate the Earnings Per Share (EPS), we need to know the number of shares. EPS is calculated by dividing the net profit by the number of shares. However, the number of shares is not provided in the given data, so it is insufficient to calculate the EPS. Therefore, that the data is insufficient for solving this problem.

The Price to Book Ratio (P/B Ratio) is calculated by dividing the market capitalization of a company by its net worth. The market capitalization is determined by multiplying the share price by the number of shares trading. In this case, the market cap is Rs. 35 x 10 million = Rs. 350 million. The net worth is calculated as assets minus liabilities, which is Rs. 120 million - Rs. 40 million = Rs. 80 million. Therefore, the P/B ratio is Rs. 350 million / Rs. 80 million = 4.37x. Hence, 4.37x.

The balance of payments statement comprises two accounts: the current account and the capital account. The current account records transactions related to revenue, including imports and exports of goods and services. Loans, on the other hand, are categorized under the capital account, which captures capital flows such as foreign direct investment (FDI), foreign institutional investment (FII), loans, and grants. Therefore, loans are not a component of the current account.

Interest rates and bond prices have an inverse relationship. When interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. This relationship exists because when interest rates increase, newly issued bonds offer higher coupon rates, making existing bonds with lower coupon rates less attractive. As a result, the prices of existing bonds decrease to align with the higher yields available in the market. Conversely, when interest rates decrease, existing bonds with higher coupon rates become more desirable, leading to an increase in their prices. Therefore, They move in opposite directions.

The face value of a share is a nominal value assigned to it by the company when it is issued. Dividends, on the other hand, are declared on a per-share basis in rupee terms, as mandated by SEBI. This practice eliminates the confusion that arises when comparing dividends on shares with different face values. Therefore, the correct statement is that dividends are not declared as a percentage of the face value of the share.

Communication with management requires analysts to have clarity of thoughts and good listening ability, but there are a few additional principles that analysts must keep in mind while talking to the management of a company. Independence and neutrality of view, pre-meeting research, and clarity of questions asked are all important in the context of client meetings. Therefore, All of the above.

To calculate the market capitalization of a company, we need to multiply the market price per share by the number of shares outstanding. However, the number of shares is not provided in the given data, so we cannot directly calculate the market capitalization.

Return on Equity (ROE) is the ratio of net profit to the book value of equity. Given that the ROE is 25%, we can calculate the book value of equity using the net profit.

ROE = (Net Profit / Book Value of Equity) * 100

25% = (80,000 / Book Value of Equity) * 100

Dividing both sides by 100 and rearranging the equation, we get:

Book Value of Equity = 80,000 / (25/100) = 80,000 / 0.25 = 320,000

Now, to calculate the market capitalization, we need the number of shares outstanding. If we assume that the book value per share of Rs. 100 remains constant, we can divide the book value of equity by the book value per share to obtain the number of shares:

Number of Shares = Book Value of Equity / Book Value per Share = 320,000 / 100 = 3,200

Finally, to calculate the market capitalization, we multiply the market price per share by the number of shares:

Market Capitalization = Market Price per Share * Number of Shares = Rs. 200 * 3,200 = Rs. 640,000

Therefore, the market capitalization of the company is Rs. 640,000.

Insider information is material non-public information that, when published, would immediately affect an investor's decision to buy or sell the security. Among the given options, the Managing Director mentioning about an acquisition proposal not yet disclosed to the public would be considered insider information as it is a material fact that is not yet public. Therefore, The Managing Director mentioning about an acquisition proposal not yet disclosed to the public.

The emergence of smart phones with built-in cameras has posed competition to entry-level digital cameras. Customers now have the convenience of capturing photos using their smartphones, reducing the demand for separate digital cameras. Therefore, smart phones.

To calculate the fair value of a company's equity, we can use the following steps:

Step 1: Determine the EBIT (Earnings Before Interest and Taxes).
- Given that the EBIT is Rs 100 crores.

Step 2: Find the average EV/EBIT ratio.
- Given that the average EV/EBIT ratio is 8.0x.

Step 3: Calculate the fair value of the company's equity.
- Fair value of equity = EBIT x EV/EBIT ratio
- Substituting the values, we get:
Fair value of equity = Rs. 100 crores x 8.0
Fair value of equity = Rs. 800 crores

Step 4: Account for net cash.
- Given that the company has net cash of Rs. 65 crores.

Step 5: Add net cash to the fair value of equity.
- Fair value of equity with net cash = Fair value of equity + Net cash
- Substituting the values, we get:
Fair value of equity with net cash = Rs. 800 crores + Rs. 65 crores
Fair value of equity with net cash = Rs. 865 crores

Therefore, the closest value to the fair value of the company's equity, based on the given information, is Rs. 865 crores. This represents the value of the company's equity after considering the EBIT, EV/EBIT ratio, and net cash position.

The general state of an economy is influenced by various factors. It is determined by domestic consumption, which reflects the spending patterns of individuals and households. The quality of life, including factors such as education, healthcare, and infrastructure, also plays a significant role. Additionally, domestic production, including the output of goods and services, contributes to the overall state of the economy. Therefore, option d, all of the above, is the correct answer.

During the expansion phase of economies, the unemployment rate tends to fall. This is because as the economy grows and expands, businesses create more jobs, leading to a decrease in the number of unemployed individuals. Therefore, Falls.

According to the SEBI Insider Trading Regulations, deemed to be connected persons include "A holding company, subsidiary, or associate company under the same management or group." This means that all of the options mentioned in the question—company under the same management, subsidiary of the company, and company under the same group—are considered connected persons under the regulations. Therefore, All of the above.

Customs duty is a tax levied on almost all imported products in India. The rate of customs duty varies based on the type of product being imported. It is not limited to specific goods such as only liquor or only fossil fuels, but applies to all imported goods. Therefore, All imported goods.

When an investor suffers a loss in their bond portfolio due to the insolvency of the company, it is known as credit risk. Credit risk refers to the possibility that a particular bond issuer will not be able to make expected interest rate payments and/or principal repayment. Debt instruments are subject to default risk as the ability of the issuer to service the debt may change over time. In the case of insolvency, the investor may experience a loss or even a total loss of their investment. Therefore, Credit Risk.

Here's the correct calculation of Return on Equity (ROE):

Net Income = Profit before dividend - Total Dividends
Given:
Profit before dividend = Rs. 1,800,000
Total Dividends = Rs. 1,200,000

Net Income = Rs. 1,800,000 - Rs. 1,200,000 = Rs. 600,000

Book Value per Share = Rs. 15
Number of Shares = Rs. 2,000,000 / Rs. 10 = 200,000 shares

Total Book Value of the company = Book Value per Share * Number of Shares = Rs. 15 * 200,000 = Rs. 3,000,000

Return on Equity (ROE) = (Net Income / Total Book Value of the company) * 100
ROE = (Rs. 600,000 / Rs. 3,000,000) * 100 = 20%

Therefore, the correct Return on Equity (ROE) for the company is 20%.

Unfair trade practices involve various deceptive practices in the securities markets. These practices include active concealment of material facts, wilful misstatements, and making false suggestions. However, publicly known information is not considered an unfair trade practice as it refers to information that is widely available and accessible to the public. Therefore, Publicly known information.

To calculate the dividend per share using the given information, we can follow these steps:

Step 1: Determine the earnings per share (EPS).
- Given that the PE ratio is 14, which is equal to the market price per share divided by EPS.
- PE ratio = Market Price per Share / EPS
- Substituting the values, we get:
14 = Market Price per Share / EPS
- Rearranging the equation, we find:
EPS = Market Price per Share / 14
- Given that the market price per share is Rs. 42:
EPS = 42 / 14
EPS = Rs. 3

Step 2: Determine the dividend per share.
- Given that the dividend payout ratio is 50%.
- Dividend per Share = EPS * Dividend Payout Ratio
- Substituting the values, we get:
Dividend per Share = Rs. 3 * 50%
Dividend per Share = Rs. 3 * 0.5
Dividend per Share = Rs. 1.5

Therefore, based on the given information, the dividend per share is calculated to be Rs. 1.5. This represents the amount of dividend paid per share, considering the earnings per share and the dividend payout ratio.

The research analyst will provide their opinion on various matters within a research report. This includes evaluating the company's valuation, assessing the industry's competitiveness, and providing insights into financial forecasting using different ratios. Therefore, All of the above.

To calculate the Dividend Per Share using the given information, we can follow these steps:

Step 1: Determine the EBIT (earnings before interest and taxes).
- Given that EBIT is 50% of the business.
- EBIT = 50% of Sales.
- EBIT = 50% of Rs. 1,200,000.
- EBIT = Rs. 600,000.

Step 2: Determine the Net Profit.
- Given that the Net Profit margin is 25% of Sales.
- Net Profit = 25% of Sales.
- Net Profit = 25% of Rs. 1,200,000.
- Net Profit = Rs. 300,000.

Step 3: Determine the Earnings Per Share (EPS).
- Given the Net Profit and the number of shares outstanding.
- EPS = Net Profit / Number of Shares Outstanding.
- EPS = Rs. 300,000 / 50,000.
- EPS = Rs. 6.

Step 4: Determine the Dividend Per Share.
- Given that the Retention Ratio is 50%, meaning the Dividend Payout Ratio is 50% (100% - 50%).
- Dividend Per Share = Dividend Payout Ratio * EPS.
- Dividend Per Share = 50% * Rs. 6.
- Dividend Per Share = Rs. 3.

Therefore, based on the given information, the Dividend Per Share is calculated to be Rs. 3. This represents the amount of dividend paid per share, considering the earnings per share and the dividend payout ratio.

Online businesses are indeed dependent on internet penetration and the changing habits of people when it comes to shopping. The success of online businesses relies on the widespread availability and adoption of the internet as well as the willingness of consumers to embrace online shopping. Hence, the statement is true.

Credit risk or default risk refers to the possibility that a particular bond issuer will not be able to make expected interest rate payments and/or principal repayment. Government bonds have no credit risk associated with their local currency borrowings because the government has the ability to raise funds to pay off its domestic currency debt through taxation or by printing more currency. Therefore, Government Bonds.

A depository is responsible for holding securities of investors in electronic form and maintaining ownership records. It provides a centralized system for safekeeping and transferring securities without the need for physical certificates. Therefore, depository.

Regulation 17 of the code of conduct for Research Analyst prohibits the calculation of the bonus based on the brokerage generated by dealing in companies the research analyst covers. The regulation states that research entities shall not pay any bonus, salary, or other form of compensation to any individual employed as a research analyst that is determined or based on any specific merchant banking or investment banking or brokerage services transaction. Therefore, Calculation of bonus based on the brokerage generated by dealing in companies the research analyst covers.

Foreign capital flows to a country can be either in the form of active investment known as Foreign Direct Investment (FDI) or passive investment known as Foreign Portfolio Investment (FPI). Foreign Portfolio Investment refers to investments by foreign investors in existing financial instruments, such as stocks and bonds, without participating in the management of the business. Therefore, Foreign Portfolio Investment.