Finance Numericals

Portfolio Management: It is a process of managing the money of an individual by investing money into different securities to maximise the return and reduces the risk. It is done under the expert guidance of portfolio manager. It is an art of selecting the right securities to make a security portfolio for earning high return. Importance: ·          Diversification: There are different securities in a portfolio which reduces the risk of losing the investment amount. ·          Handle by expert: The portfolio is managed by expert who is continuously analysing the market securities under different environment. ·           Time consuming: The market changes very fast and the individuals don’t have enough time to check his investment status time to time. So, it is best if the investment decision is handling by expert. ·          Chances of maximise return: If the portfolio is managed by expert then the chance of earning high return is maximise. Modern Portfolio T

Reasons for Merger: ·          To diversify its business company takes the decision to merge with the company which is totally different from its business activity or product and services. ·          To eliminate or to reduce the market competition companies are join hand in the form of merger. ·          To increase the market size of a company, it is a best method to merge two similar companies. ·          To survive in a market, the loss making company merge with big companies and it works as a subsidiary company of an acquiring company. ·          To reduce the operating expenses and strengthen the financial position the two companies join hands in the form of merger. Valuation of merger: Example: Suppose Company XYZ wants to merge with Company PQR. Both the companies offers similar product and services to the customers. Company XYZ wants to know the earnings per share and market price per share of the company after merger. Find out with the help of given inform