2022 April NMIMS assignments What is industry life cycle m

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Equity Analysis and Evaluation I

1. As a Prospective investor, Ramesh is very confused on the various definitions of stock price. While attempting to invest, he comes across terms like par value, market Value and book value. Please help ramesh decipher the meaning of these terms, identifying the most relevant among the three and why? (10 Marks)

2. What is industry life cycle models? Discuss the various phases in the life cycle of an industry and the implications, limitations of each stage in forecasting the industry performance. (10 Marks)

3.a. From the following information of Best Ltd. ascertain the current intrinsic value of each share of the company: (5 Marks)
Recent EPS = INR 2.00
Growth rate (constant) = 5%
Dividend Payout Ratio = 50%
Required Rate of Return = 10%
After five years the P/E ratio is 10.5

3.b. Find below the data of five securities for the year 2020 and 2021.
Using the price- Weighted index, calculate:
The price return index for the year 2021. (5 Marks)

Securities Price at the end of 2020($) Price at the end of 2021 ($)
A 42 40
B 38 45
C 30 38
D 32 42
E 58 47

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