Tutor profile: Pritika V.
Subject: Interior Design
What are the key elements to create an aesthetically delightful interior?
When pondering about interior design, words like creativity and flair promptly spring to one's mind but many people would be astounded to find there is a degree of science involved. Professional interior designers will usually follow a set of 7 unofficial “rules”, based on precise interior design postulates and elements. These interior design elements include space, line, forms, light, color, texture, and pattern; and keeping them balanced is the key to creating an aesthetically gratifying interior. Space The establishment of an interior, space is a crucial concept to understand. The accessible ‘space’ usually can’t be easily changed. Another thing about space is the concept of positive and negative space. A space containing furniture or decor items is known as a positive space. Anything else is called negative space. There must be a balance between these two so that your room looks neither crowded nor empty. Line Horizontal, vertical and dynamic lines help to shape a room and guide the eye. Creating lines using the room’s furnishings and structural design can form harmony, unity, and contrast. Form The form is the shape of the room, as well as any objects within the room. In other words, it relates to the physical form of anything that is three dimensional. Forms can usually be described as either geometric or natural. Light Natural or man-made light is a critical aspect of any space. Without it, all of the other components would not be able to shine to their full potential. Light can be broken into the categories of task lighting (defined purpose), accent lighting (emphasizing objects) and mood lighting (adding ambiance). Colour Colour is a science all on its own and is another remarkably important element that interior designers master. It has the ability to create mood, define unity and alter the perception of how large or small a space is. Texture Texture refers to the tactile surface of an object or finish. It’s an element that is often overlooked but really does have the ability to bring a unique dimension to the room. Just like mixing color and pattern, an interior designer mixes the textures within a space to give an ingenious sense of depth. Pattern Paired with color, the pattern offers a similar use to texture in that it can add appeal to a room. A pattern is created by the use of repetitive design and can be found in wallpaper, soft furnishings, rugs, and fabrics. When used well, patterns create interest and attraction and could provide continuity from room to room.
What do you mean by Current Account Deficit (CAD) and Current Account Surplus (CAS)? What is the Devaluation of currency? Which nation's government (CAD or CAS) can use the devaluation of currency in its favor?
Current Account Deficit (CAD) is a state that arises when the receipts on the current account are less than the payments on the current account. In naive terms, the Current Account Deficit (CAD) arises when the value of exports of goods and services is less than the value of imports of goods and services. Current Account surplus (CAS) is a condition that occurs when the receipts on the current account are higher than the payments on the current account. In naive terms, Current Account Surplus (CAS) arises when the worth of exports of goods and services is more than the value of imports of goods and services. CAD implies that the nation is a borrower from the rest of the world, whereas, CAS means that the nation is a lender to the rest of the world. Devaluation designates a fall in the external value of a currency and is used in a system of fixed exchange rates. In this system, the exchange value of a currency is decided by the government. Devaluation of currency is the voluntary action of the government. It normally boosts exports from a country, as exports become more affordable for foreign nationals and foreign currency can now purchase more of domestic goods, i.e. the international competitiveness of the goods and services of such a nation gets better. Devaluation of the value of domestic currency promotes the exports of the country and may adversely impact the production and sale of importing countries. Therefore, it is an effective foreign economic policy for Current Account surplus countries, which are net exporters to the rest of the world.
The current stock price for Manappuram Finance Ltd. is Rs. 108.95 and the company extends a dividend of Rs. 1.80 per share with a Dividend Payout Ratio of 24.05%. The current return on equity for the company is 18.36%. The current Rate of Return for the 3-month government Treasury bill is 6.90% while the Market Rate of Return for the equity market is 12.86%. The covariance of the return of Manappuram Finance Ltd. with the return of the overall market is 12.25% and the variance of the return of the market is 7.56% for the same period. Using the Dividend Discount Model, conclude whether at the current stock price, Manappuram Finance Ltd. is undervalued or overvalued and whether one should consider this as a buy or a sell indicator.
Beta for the stock = β = Covariance(MFL, Market)/Variance(Market) = 0.1286/0.0756 = 1.62 The required rate of return for the firm is calculated using the Capital Asset Pricing Model (CAPM) - K = R(f) + β * ( R(m) - R(f) ) Where, Rf - Risk-Free Rate of Return = 6.90% Rm - Market Rate of Return for the equity market = 12.86% β - Beta = 1.62 Putting these values into the above formula of CAPM, we get : K = 6.9% + 1.62 ( 12.86% − 6.9% ) K = 16.54% The sustainable growth rate of the firm, g = RR * ROE Where, Retention Rate ( RR ) = 1 - Dividend Payout Ratio = (1 -.0.2405) * 100% = 75.95% Return On Equity ( ROE ) = Net Income / Shareholders‘ equity = 18.36% Therefore, g = 75.95 * 0.1836 = 13.96% Using the formula for the Dividend Discount Model- Fair value = D / (k − g) = 1.80 / (0.1654 - 0.1396) = 1.80/0.0258 = Rs. 69.77. In comparison to the prevailing share price of Rs. 108.95, the Dividend Discount Model (DDM) leads us to the conclusion that the stock is currently overvalued and is priced at more than it's fair value. So, one would give a SELL signal for it.