Project Planning

Ques 1. ADCL is a movie production company set up by three persons with experience in the movie persistence about six years ago. One of them is a confidential information star and he owns 50% righteousness of ADCL, the other 2 own 25% each(prenominal). ADCLs recent movie, The Indian day-dream turned out to be a blockbuster at the box office. Enthused with this success, the promoter wants to double the number of movies produced by the company. To pass on this goal the company plans to raise Rs. 50 crore from external sources. designate the financing method that seems most appropriate for each touch and give your reasons for the alike(p).

Ans.

Ques 2. Describe the procedure for calculating a jumps required rate of harvest as per the gravid asset pricing model.
Ans. The procedure for calculating a forcing outs required rate of pass off as per the outstanding asset pricing model involves following steps:
gait 1. Find a sample of firms move in the same line of business. If a firm is considering a project for manufacturing a certain product, identify a sample of firms which are engaged wholly or largely in the manufacture of that product.
shade 2. Obtain equity betas for the sample firms. Regress the periodical return of the equity stock of the firm on the monthly return of the market portfolio for 50 to 60 months.



Where 50 to 60 observations of monthly returns are not available, you may use 50-60 observations of fortnightly returns.
footprint 3. Derive asset betas after adjusting equity betas for financial leverage. For each firm in the sample, the asset beta can be derived from its equity beta using the following relationship:

?a=?E1+DE1-T
Step 4. Find the clean of the asset betas. Once the asset betas for the sample firms are obtained, the average can be right away calculated.
Step 5. Figure out the equity beta for the proposed project. The equity beta for the proposed project can be derived by adjusting the average asset beta for the financial leverage planned for the project. echo the formula...If you want to get a full essay, order it on our website: Orderessay



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