Download GTU (Gujarat Technological University) MBA 2019 Winter 3rd Sem 1539341 Investment Banking Previous Question Paper
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (IB) ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code:1539341 Date:04/12/2019
Subject Name: INVESTMENT BANKING
Time: 10.30 am to 01.30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1. Answer the following questions 14
1. Explain the meaning of QIB.
2. What is ADR and GDR?
3. Define junk bonds.
4. Discuss the concept of underwriting.
5. What is private placement?
6. Define P/E and explain its significance in analyzing the value of the
company.
7. Explain the meaning of convertible bonds.
Q.2 (a) Explain the core services offered by the investment bankers and how are they
different from commercial banking?
07
Q.2 (b) Discuss the regulatory framework for the Investment Banking in India. 07
OR
Q.2 (b) Explain in detail how the credit rating agencies can help the investor as well
as the issuer in raising the funds.
07
Q.3 (a) Briefly discuss the role of various participants in the Primary market. 07
Q.3 (b) Mr. Niraj Pathak has developed an app for the local retailers in Ahmedabad
and wants to covert this idea in to profitable opportunity. He wants to pitch
this idea to the venture capital investors. Kindly suggest him the factors
considered by the venture capitalists in funding the venture.
07
OR
Q.3 (a) Briefly discuss various funding options available to the company in
international market.
07
Q.3 (b) Vikas Ltd, an agribusiness solution provider, wants to acquire Akash Ltd, a
small firm operating in contract farming business. Discuss the implication of
this acquisition for the acquirer and the target firm.
07
Q.4 (a) Discuss the role of the investment banker in structuring the merger and
acquisition deal.
07
Q.4 (b) The free cash flow of a firm is projected to grow at a compound annual
average rate of 30% for the next 5 years. Growth is then expected to slow
down to a normal 5% annual growth rate. The current year?s cash-flow to the
firm is Rs. 5,00,000. The firm?s cost of capital is 18% during high growth
period and 12% beyond the 5th year, as growth stabilizes. Estimate the value
of the firm.
[PVIF @18% for year 1 to 5: 0.847, 0.718, 0.609, 0.516, 0.437]
07
OR
Q.4 (a) What is LBO? Explain features and the economics of LBO. 07
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (IB) ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code:1539341 Date:04/12/2019
Subject Name: INVESTMENT BANKING
Time: 10.30 am to 01.30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1. Answer the following questions 14
1. Explain the meaning of QIB.
2. What is ADR and GDR?
3. Define junk bonds.
4. Discuss the concept of underwriting.
5. What is private placement?
6. Define P/E and explain its significance in analyzing the value of the
company.
7. Explain the meaning of convertible bonds.
Q.2 (a) Explain the core services offered by the investment bankers and how are they
different from commercial banking?
07
Q.2 (b) Discuss the regulatory framework for the Investment Banking in India. 07
OR
Q.2 (b) Explain in detail how the credit rating agencies can help the investor as well
as the issuer in raising the funds.
07
Q.3 (a) Briefly discuss the role of various participants in the Primary market. 07
Q.3 (b) Mr. Niraj Pathak has developed an app for the local retailers in Ahmedabad
and wants to covert this idea in to profitable opportunity. He wants to pitch
this idea to the venture capital investors. Kindly suggest him the factors
considered by the venture capitalists in funding the venture.
07
OR
Q.3 (a) Briefly discuss various funding options available to the company in
international market.
07
Q.3 (b) Vikas Ltd, an agribusiness solution provider, wants to acquire Akash Ltd, a
small firm operating in contract farming business. Discuss the implication of
this acquisition for the acquirer and the target firm.
07
Q.4 (a) Discuss the role of the investment banker in structuring the merger and
acquisition deal.
07
Q.4 (b) The free cash flow of a firm is projected to grow at a compound annual
average rate of 30% for the next 5 years. Growth is then expected to slow
down to a normal 5% annual growth rate. The current year?s cash-flow to the
firm is Rs. 5,00,000. The firm?s cost of capital is 18% during high growth
period and 12% beyond the 5th year, as growth stabilizes. Estimate the value
of the firm.
[PVIF @18% for year 1 to 5: 0.847, 0.718, 0.609, 0.516, 0.437]
07
OR
Q.4 (a) What is LBO? Explain features and the economics of LBO. 07
Q.4 (b) ABC ltd. wants to acquire XYZ ltd. However, the management of the
company is in dilemma regarding the valuation of XYZ ltd. The management
of ABC ltd. seeks your help. As an investment banker, present an overview
of various models available for business valuation, to the management of
ABC ltd.
07
Q.5 Green Fuel Ltd is a private limited company based in Ahmedabad. The
company is engaged in providing sustainable energy solutions with a vision
to contribute to clean energy generation through bioenergy, including solid
bio-fuel, liquid bio-fuels, bio-power, and other forms of clean energy
generation. The company is having good presence in Gujarat and now wants
to explore the possibility of expansion across India.
The company was set us in the year 2012. It has been seven years since its
establishment and it is operating upon a very successful and profitable
business model. Since, last five years, the company has not incurred any
losses. The company has a net worth of Rs. 15 crore in each of the preceding
three years. Further, the company is having the net tangible assets of Rs. 6
crore. The company has large clientele base and a progressive future ahead.
The management of the company is facing a dilemma at present. For national
expansion programme, the company needs funds to the extent of Rs. 50 to
60 crores. The company has already taken loans from banks in the past. For
further expansion, the company wants to explore the possibility of coming
out with an IPO. At present, the management of the company is not having
a clear idea regarding the process and the intermediaries involved in this
process.
You are appointed as a lead merchant banker for this IPO.
In relation to this situation, answer the following questions. You may make
relevant assumptions to support your answer.
Q.5 (a) Considering the case facts, you are required to suggest the company whether
it should go for private placement or IPO? Suggest the pros and cons for both
the options for evaluation to the management of the company.
07
Q.5 (b) As a merchant banker, briefly give an overview of the pre and post issue
activities involved in the IPO process.
07
OR
Q.5 (a) If the management of the company decides to go for an IPO, whether the
company is eligible for coming out with the IPO? Evaluate all the conditions
in the context of the case facts.
07
Q.5 (b) As a merchant banker, you are required to suggest the pricing mechanism for
this IPO.
07
****************
FirstRanker.com - FirstRanker's Choice
This post was last modified on 19 February 2020