BBM Mid-Sem Questions

P.K.R ARTS COLLEGE FOR WOMEN,GOBI
DEPARTMENT OF BUSINESS MANAGEMENT
II-BBM – FINANCIAL MANAGEMENT
TIME: 3 hrs MAX .MARKS=75
PART-A (10 *1 =10)
ANSWER ALL THE QUESTIONS
1) The scope of finance function is as wide as the ------of finance
2) Finance holds -------------------- to all activities
3) Finance means to arrange --------------------------for it
4) A fixed rate of --------------- is payable on debentures
5) Capital which is in short term normal liquid assets is described as -------
6) --------is an average of the cost of each source of funds employed by the firm
7) k=r + ----------+ -----------
8) Cost of capital is the -------------rate of return expected by its investors
9) Degree of financial leverage=--------------
10) A firm will have favourable leverage if its -----------are more than the debt cost
PART-B ( 5*5=25 )
ANSWER ALL THE QUESTIONS
11. a) Explain the aims of Finance function (or)
11.b) Distinguish between debentures and shares
12.a) Explain the Importance of financial management (or)
12.b) What is Profit maximization?
13.a) A Ltd issues Rs.1,00,000 8% debentures at a discount of 5%.The tax rate is 50%.Compute the cost
of debt Capital. (or)
13.b) B Ltd, issues Rs.1,00,000 9% debentures at a premium of 10%.The cost of floatation are 2 %.The
tax rate applicable is 60 %.compute cost of debt Capital
14.a) A Company issues 10,000 10% preference shares of Rs,100 each.Cost of issues is Rs.2 per share.
Calculate cost of preference capital if these shares are issued at a discount of 5%. (or)
14.b) A company issues 1000 7% preference shares of Rs.100 each at a premium of 10 % redeemable
after 5 years at par. compute the cost of preference capital
15.a) Explain the concept of optimal capital structure (or)
15.b) Write the MM approach on capital structure
PART-C (5*8=40)
ANSWER ALL THE QUESTIONS
16.a) Discuss the various objectives of financial management (or)
16.b) Explain the scope of finance function
17.a) What are all the sources of long term financing? (or)
17.b) Explain the different classification of cost of capital.
18.a) Explain the significance of the cost of capital. (or)
18.b) What are the factors in determination of cost of capital?
19.a) Explain how the cost of equity and cost of preference share capital
Can be calculated. (or)
19.b) What are the different types of dividend policies?
20.a) Explain the factors that are usual consider in shaping of dividend policy. (or)
20.b) Explain the factors influencing the capital structure of a company.