Commodity Market: Basis & Cost of Carry
Contango: Futures Price > Spot Price (Basis < 0); Backwardation: Futures Price < Spot Price (Basis > 0). r: Financing / cost-of-carry rate; t: Months to expiry.
Cost of carry reflects interest financing, warehousing, and insurance incurred until delivery.
A parent entity has 2 Crore equity shares trading at Rs 450 per share. It has preferred capital of Rs 50 Cr, standalone debt of Rs 200 Cr, and standalone cash of Rs 60 Cr. Its subsidiary has minority interest of Rs 80 Cr, debt of Rs 120 Cr, and cash/liquid investments of Rs 40 Cr. Compute Standalone and Consolidated EV.
Zenith Pharma reports Net Profit after Tax of Rs 180 Crore for FY2026. The company has 12 Crore equity shares outstanding with a Face Value of Rs 2 each. The Board declares a dividend of 250%. Calculate Basic EPS, DPS, and the Dividend Payout Ratio.
An 8.50% coupon G-Sec (Face Value Rs 100) is purchased in the secondary market at Rs 102.00. The investor holds it for 1 year, collects the annual coupon of Rs 8.50, reinvests the coupon at 6.00% p.a. for 1 year, and sells the bond at Rs 106.00. Calculate the Current Yield and the 1-year HPR.
A 3-year annual bond with Face Value Rs 1,000 carries an 8% coupon and currently trades at par (Yield y = 8%). Its Macaulay Duration is calculated as 2.783 years. Calculate its Modified Duration and the expected % price change if interest rates increase by 75 basis points (+0.75%).
Spot Gold trades on MCX at Rs 72,000 per 10 grams. The risk-free financing rate is 7.5% p.a., storage and insurance costs are 0.8% p.a., and convenience yield is zero. Calculate the fair value of a 2-month futures contract.