Research Analyst Certification Free Demo Test 1

Explanation:
The dividend paid per share is Rs. 2 and the number of outstanding shares are 10,000.

So the total dividend paid is Rs. 2 X 10,000  = Rs.20,000

The Dividend Payout ratio is 40%. This means Rs 20000 paid as divided is 40% of the Net Profit.

So the Net Profit is Rs. 50000  ( 20000 / 40  x 100 )

The Net Profit is 20% of EBITDA.

Rs 50000 is the Net Profit, So the EBITDA will be 50000 / 20  X 100  = 250000

EBITDA is 40% of the business ie Sales.

EBITDA is 250000. So Sales will be  250000 / 40 X 100 = 625000

Explanation:
SEBI can take various actions against intermediaries in the securities market, including registration, inspection, penalties, and disciplinary actions for violations. It ensures fair and transparent market practices through enforcement, education, and coordination with law enforcement agencies.

Explanation:
First we calculate the number of Shares.

EPS = Income  / No. of Shares

1 = 80000 / No. of Shares

So No. of Shares = 80,000

Now we calculate the Market Price of a Share

PE =  Market Price / EPS

Market Price = PE X EPS

= 12 x 1 = 12

Book Value =  Price / Price to Book Ratio

= 12  / 1.3  =  9.23

Equity (Networth) =  Book Value x No. of Shares

= 9.23 x 80,000  = 738400

Asset to Equity Ratio = Asset / Equity

= 1000000 / 738400

= 1.35

Explanation:
Dividend Declared is 30% of Rs 5 = Rs 1.5

Dividend Payout Ratio = Yearly Dividend per Share / EPS

40%  ie. 0.4 = 1.5 / EPS

EPS = 1.5 / 0.4  = 3.75

PE =  Market Price / EPS

= 60 / 3.75

PE = 16

Earnings Yield formula is reverse of PE ratio formula x 100.

= EPS / Market Price  x 100

= 3.75 / 60  x 100

0.0625  x 100 = 6.25%

Explanation:
Correct and detailed management views can be obtained only through personal interactions with them. These views are generally not available elsewhere.

Explanation:
“The demand and supply of its securities in the stock exchange” is not typically considered a valuation parameter because it reflects market dynamics and investor sentiment, rather than specific financial metrics used for evaluating a company’s fundamental value. Valuation parameters usually involve financial ratios and metrics that provide a more direct assessment of a company’s worth.

Explanation:
Investors hold on to some information that may no longer be relevant, and make their decisions based on that. New information is labelled as incorrect or irrelevant and ignored in the decision making process. This is known as Anchoring bias.

Explanation:
Some of the instances of unfair trade practices cited in the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulation, 2003 are as follows:

1. a) A wilful misrepresentation of the truth or concealment of material fact in order that another person may act, to his detriment b) A suggestion as to a fact which is not true, by one who does not believe it to be true c) An active concealment of a fact by a person having knowledge or belief of the fact d) A promise made without any intention of performing it e) A representation, whether true or false, made in a reckless and careless manner.

Publicly know information is not a unfair trade practice.

Explanation:
Attractive Industry from shareholders’ perspective is one that has one or more the following salient features that create a profitable atmosphere for the business:

1. Low competition
2. High barriers to entry
3. Weak suppliers’ bargaining power
4. Weak buyers’ bargaining power
5. Few substitutes

If an industry is having these features, it would have strong pricing power and high profit margins and attract investors.

Explanation:
A company may have a good product, good marketing etc. but to make the product reach the consumers, it needs a good distribution network. If the distributors , retailers etc. are not happy (due to any reason) , this product may not reach the consumers.