[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-294919-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-294919-en":130},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","paper-2-advanced-financial-management","PAPER - 2 - ADVANCED FINANCIAL MANAGEMENT","","Advanced Financial Management Paper - 2 includes compulsory Question 1 with additional instructions to attempt any four of the remaining questions, with working notes to be part of the answers. The document focuses on equity valuation and strategic financial policy, including advising an investor to buy, hold, or sell using risk-free rate, market risk premium, beta, dividend growth, and revised market valuation. It also covers mutual fund NAV calculation using purchase-time assumptions, and explains how money-oriented inputs and outputs underpin organizational strategic management.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/paper-2-advanced-financial-management/294919/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/paper-2-advanced-financial-management/294919.png","ImageObject",300,407,{"name":42,"@type":43},"Chumphorn","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-31","2026-09-18",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",7,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"In Question 1(a), how is the investor advised to act (BUY/HOLD/SELL)?","Question",{"text":63,"@type":64},"Compute the existing and revised rates of return using the risk-free rate, beta, and market risk premium, then derive the share price under both scenarios. Compare the revised price with the current market price to decide HOLD, BUY, or SELL.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How is mutual fund NAV at the time of purchase calculated in Question 1(b)?",{"text":68,"@type":64},"Use the given effective yield p.a. and the holding period, assuming 365 days in a year. Solve for the purchase-time NAV per unit based on each scheme’s investment amount, NAV on 31.03.2023, and dividend received.",{"name":70,"@type":61,"acceptedAnswer":71},"What does Question 1(c) explain about strategic management and financial policy?",{"text":72,"@type":64},"It links organizational strategy to financial flows: the organization starts with money and ultimately returns money, emphasizing that funds mobilization, capital structure, investment allocation, and dividend policy are interdependent in shaping overall performance and growth.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},294919,1790029606,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,110,114,119,122,126],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":93,"show_sort_weight":94,"slug":95},"Exam",70,"exam",{"id":97,"doc_module":4,"doc_module_name":25,"category_name":98,"show_sort_weight":99,"slug":100},5,"Comic",60,"comic",{"id":102,"doc_module":4,"doc_module_name":25,"category_name":103,"show_sort_weight":104,"slug":105},6,"Technology",50,"technology",{"id":55,"doc_module":4,"doc_module_name":25,"category_name":107,"show_sort_weight":108,"slug":109},"Healthcare",40,"healthcare",{"id":111,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":112,"slug":113},8,30,"research-report",{"id":115,"doc_module":4,"doc_module_name":25,"category_name":116,"show_sort_weight":117,"slug":118},9,"Religion & Spirituality",20,"religion-spirituality",{"id":117,"doc_module":4,"doc_module_name":25,"category_name":120,"show_sort_weight":117,"slug":121},"World Cup","world-cup",{"id":123,"doc_module":4,"doc_module_name":25,"category_name":124,"show_sort_weight":123,"slug":125},10,"Lifestyle","lifestyle",{"id":127,"doc_module":4,"doc_module_name":25,"category_name":128,"show_sort_weight":97,"slug":129},19,"General","general",{"code":4,"msg":82,"data":131},{"doc_id":79,"user_id":132,"nickname":42,"user_avatar":133,"doc_module":4,"category_id":111,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":139,"language":140,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":12,"update_tm":144,"read_time":145,"preview_page_count":4},2336475401981,"https://ap-avatar.wpscdn.com/avatar/22000c94efd8d5204d?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786935347598174694","PAPER – 2 : ADVANCED FINANCIAL MANAGEMENT  \nQuestion No. 1 is compulsory.  \nCandidates are also required to answer any four from the remaining five  \nquestions.  \nWorking notes should form part of the respective answer.  \nQuestion 1  \n(a) An investor is holding 1,000 shares of X Ltd., Current Year dividend rate is `  \n3 per share. Market price of the share is ` 35 each. The investor is concerned about several factors which are likely to change during the next financial year as indicated below:  \n\n| Particulars | Current Year | Next Financial Year |\n| --- | --- | --- |\n| Dividend paid / anticipated per share (`) | 3.00 | 3.25 |\n| Risk Free Rate | 11% | 12% |\n| Market Risk Premium | 4% | 5% |\n| Beta Value | 1.5 | 1.6 |\n| Expected growth | 8% | 10% |\n\nAdvise the investor to take further action, whether to BUY, HOLD or SELL the shares, based on the above information. (6 Marks)  \n(b) Mr. Kar has invested in three mutual fund schemes as per details below:  \n\n|  | MFX | MFY | MFZ |\n| --- | --- | --- | --- |\n| Amount of investment (`) | 5,50,000 | 4,20,000 | 1,00,000 |\n| Dividend received up to 31.03.2023 (`) | 10,000 | 6,000 | Nil |\n| NAV as on 31.03.2023 (`) | 11.50 | 11.00 | 9.50 |\n| Effective yield p.a. as on 31.03.2023 | 19.345% | 22.59% | -36.50% |\n| Holding period | 120 days | 100 days | 50 days |\n\nYou are required to calculate Net Asset Value (NAV) at the time of purchase assuming 365 days in a year. (4 Marks)  \n(c) \"The starting point of an organisation is money and the end point of that organization is also money\". Explain the statement to clearly understand this interface of strategic management and financial policy. (4 Marks)  \nAnswer  \n(a) On the basis of existing and revised factors, rate of return and price of share is to be calculated.  \nExisting rate of return  \n= Rf + Beta (Rm – Rf)  \n= 11% + 1.5 (4%) = 17.00% Revised rate of return  \n= 12% + 1.6 (5%) = 20.00% Price of share (original)  \nD (1 + g)  3 (1.08)   3.24  \nP = = = = ` 36.00  \no K -g 0.17-0.08 0.09  \ne  \nPrice of share (Revised)  \n3.25 (1.10)   3.575  \nP = = = ` 35.75  \no 0.20-0.10 0.10  \nAdvice- As the existing market price of the share is ` 35, Current Equilibrium Price of the share ` 36 and Revised Price ` 35.75 are almost equal. Under this situation investor should hold the share.  \n(b)  \n\n|  | MFX | MFY | MFZ |\n| --- | --- | --- | --- |\n| A. Amt. of Investment | 550,000 | 420,000 | 1,00,000 |\n| B. Effective Yield p.a. | 19.345% | 22.59% | -36.50% |\n| C. Period of Holding | 120 Days | 100 Days | 50 days |\n| D. Return for Holding Period | 34,980 | 25,993.97 | -5000 |\n| E. Dividend Received | 10,000 | 6,000 | - |\n\n\n| F. Total Gain in NAV(D-E)\u003Cbr>G. Total NAV at End of Holding Period (A + F)\u003Cbr>H. NAV (p.u.) as on 31.3.23\u003Cbr>I. No. of Units (G/H)\u003Cbr>J. NAV (p. u.) at the time of Purchase (A/I) | 24,980\u003Cbr>5,74,980\u003Cbr>11.50 49,998.26\u003Cbr>11.00 | 19993.97\u003Cbr>4,39,993.97\u003Cbr>11.00 39,999.45\u003Cbr>10.50 | -5,000\u003Cbr>95,000\u003Cbr>9.50\u003Cbr>10,000\u003Cbr>10.00 |\n| --- | --- | --- | --- |\n\nAlternative Solution  \nMFX  \n550000  \n(11.50-X) × X + 10000 = 0.19345 × 120 550000 365  \n6325000 Or -550000 + 10000 = 0.0636 x 550000  \nX 6325000  \nOr X = 574980  \n6325000 Or X = 574980 = 11.00  \nMFY  \n420000  \n(11.00-Y) × Y + 6000 = 0.2259 × 100 420000 365  \n4620000 Or -420000 + 6000 = 0.062 x 420000  \nY  \nOr 4620Y000 = 440040  \n4620000 Or Y = ~~ ~~ = 10.50  \n440040  \nMFZ  \n100000  \n(9.50-Z10)×0000~~ ~~Z~~  ~~ = -03.366550 × 50 950000  \nOr -100000 = -0.05 x 100000  \nZ  \nOr 9500Z00 = 95000  \n950000 Or Z = ~~ ~~ = 10.00  \n95000  \n(c) No organization can run an existing business and promote a new expansion project without a suitable internally mobilized financial base or both i. e. internally and externally mobilized financial base.  \nSources of finance and capital structure are the most important dimensions of a strategic plan. The need for fund mobilization to support the expansion activity of firm is very vital for any organization. The generation of funds may arise out of ownership capital a","cbCaimrYOe08rvQC","https://ap.wps.com/l/cbCaimrYOe08rvQC","pdf",535236,23,"English","# Question 1\n## (a) Buy, Hold or Sell based on revised factors\n## (b) Mutual fund NAV at purchase using holding-period yield\n## (c) Strategic management interface and financial policy statement\n# Question 2","[{\"question\":\"In Question 1(a), how is the investor advised to act (BUY/HOLD/SELL)?\",\"answer\":\"Compute the existing and revised rates of return using the risk-free rate, beta, and market risk premium, then derive the share price under both scenarios. Compare the revised price with the current market price to decide HOLD, BUY, or SELL.\"},{\"question\":\"How is mutual fund NAV at the time of purchase calculated in Question 1(b)?\",\"answer\":\"Use the given effective yield p.a. and the holding period, assuming 365 days in a year. Solve for the purchase-time NAV per unit based on each scheme’s investment amount, NAV on 31.03.2023, and dividend received.\"},{\"question\":\"What does Question 1(c) explain about strategic management and financial policy?\",\"answer\":\"It links organizational strategy to financial flows: the organization starts with money and ultimately returns money, emphasizing that funds mobilization, capital structure, investment allocation, and dividend policy are interdependent in shaping overall performance and growth.\"}]","PAPER - 2 - ADVANCED FINANCIAL MANAGEMENT | PDF",1789711233,58]