BBM-FINANCIAL MANAGEMENT IMPORTANT QUESTIONS

FINANCIAL MANAGEMENT
Unit-I
1. Explain the aims of finance function.(6/17)
2. Explain participating & non-participating preference shares.(1/17)
3. Discuss the various objectives of financial management?
(OR)
Evaluate the merits & demerits of alternative goals (9/17)
4. Discuss the importance of debenture finance.(1/17)
5. Discuss the functional areas of financial management.(2/17)
6. Explain the scope of finance function. (4/17)
7. What is wealth maximization?(2/17)
8. Discuss bank finance as a source of short term finance. (1/17)
9. Evaluate the merits& demerits of debentures as a source of long term
finance. (2/17)
10. Discuss the various sources of short term finance for manufacturing company.
(2/17)
11. What are all the sources of ST financing. (8/17)
12. What are all the sources of LT financing. (10/17)
13. Define FM. Explain the function of FM. (1/17)
14. Distinguish between debentures & shares. (2/17)
15. Explain the importance of FM. (3/17)
16. What are the merits & demerits of bank credit? (1/17)
17. Explain the three famous ‘A’s of FM. (1/17)
18. Discuss the salient features of modern approaches to FM. (2/17)
19. State the role of the financial manager & explain his function in an
organization. (3/17)
20. Explain the features of debentures as a source of finance. (1/17)
21. Why profit maximization is criticized & wealth maximization is recommended.
(or)
In what respect, the wealth maximisation is considered a superior
to profit maximization objective? (or)
Discuss the various objectives of financial mgt. (or)
Evaluate the merits & demerits of alternative goals. (Or)
What is wealth & profit maximisation? (1/17)
22. Explain the characteristics of equity shares. (1/17)
23. What is profit maximisation? (1/17)
24. Explain the relationship between FM & other areas of mgt. (1/17)
25. What are the significant features of equity shares? (1/17)
26. What do you understand by financial decisions? Discuss the major financial
decisions. (1/17)
27. Explain the important sources of internal financing. (1/17)
28. What are the merits of ploughing back of profit? (3/17)

II UNIT
1. What are the components of cost of capital? (3/17)
2. Explain the difference classification of cost capital? (3/17)
3. Explain the significance of the cost of capital. (7/17)
4. What are the factors (or) problems in determinants of cost of capital?(4/17)
5. Explain the different classification of cost. (1/17)
6. How will you calculate weighted average cost of capital? (3/17)
7. What is mean by cost of capital? How would you measure the cost of
debenture capital? (1/17)
8. Explain how the cost of equity, cost of retained earnings and
cost of preference share capital can be calculated? (10/17)
9. What are the major instruments of debt capital? Why do companies use
debt capital? What are the limitations on it? (2/17)
10. Define cost of capital. Why it is considered as important? (1/17)
11. What are the limitations of trading on equity? (1/17)
12. What is leverage? Explains the different types of leverage. (1/17)





III UNIT
1. Explain the NI approach to capital system. (4/17)
2. Write the mm approach in cs. (5/17)
3. Explain the factors that are usual considered in shaping of
dividend policies. (9/17)
4. Explain the layout of optimal capital structure. (7/17)
5. Explain the relevance & irrelevance theories on dividend. (1/17)
6. Explain the factors in theories the capital structure of a company. (14/17)
7. What are the different types of dividend policies? (5/17)
8. Distinguish between stock dividend & cash dividend. (2/17)
9. State the essential of an appropriate capital structure. (1/17)
10. Explain the mm theory of dividend. (1/17)
11. Explain the EBIT-EPS analysis. (1/17)
12. Explain the form of pattern of CS? (1/17)
13. Explain stable dividend policy. (2/17)
14. Explain the drawbacks of overcapitalisam. (1/17)
15. Explain the various forms of dividend? (4/17)
16. What are the reasons for change in capitalism? (2/17)


IV UNIT
1. What is working capital and concepts of working capital? (4/17)
2. What factors are taken into account before granting credit to customers?
(1/17)
3. What are the determinants of working capital requirement of a firm? (7/17)
4. What is receivable management why it is considered important and
what are costs involved in maintain receivables? (1/17)
5. What are the motives of holding cash? (4/17)
6. What factors determine the size of receivable in a firm? (6/17)
7. Explain the importance of adequate working capital? (4/17)
8. What factors will you keep in mind for investing surplus cash? (1/17)
9. State the difference types of capital? (2/17)
10. What are the objectives of cash management? (2/17)
11. Explain the basic problems involved in cash management? (2/17)
12. Explain the various sources of working capital? (1/17)
13. Mention the costs and benefits of credit extension? (1/17)
14. Explain credit policies and credit terms. (2/17)
15. Discuss the objective of receivable management. (1/17)
16. Explain the strategies for cash management. (1/17)

V UNIT
1. Why capital budgeting divisions are considered important? (2/17)
2. Define capital budgeting state the features of payback period and
ARR method capital budgeting. (7/17)
3. Explain any two modern capital budgeting techniques or
discuss the method adopted by financial situation in project appraisal.1/17)
4. Differentiate b/w capital NPV and IRR.Method used to capital budgeting.1/17)

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.