Financial Management, Question Paper of MBA 2nd Semester,Download Previous Years Question Paper 6

MAY 2014

FINANCIAL MANAGEMENT

Roll No_________                                         MBA-MB-205                         Total no of pages: 1

Time: 3 Hours                                                                                             Max. Marks: 60

Section – A

This section contains 10 sub-questions of 2 marks each. All questions are compulsory.

1.     Objectives of Financial Management?

2.     Debentures?

3.     Capital Budgeting?

4.     Benefit-Cost ratio?

5.     Financial Leverage?

6.     Bonus Shares?

7.     Advantages of Leasing?

8.     Sources of Working Capital

9.     Cash Management?

10.                         Working Capital?                                                                                                    10 x 2 = 20

Section – B

This section contains 6 questions of 10 marks each. Attempt any four questions.

11.                        What are various sources available to Indian businessmen for raising funds? Explain?

12.                        What do you understand by capital budgeting process? Enumerate briefly the major steps involved in capital budgeting?

13.                        What is working capital? Explain various factors influencing working capital?

14.                        Discuss the various aspects or dimensions of receivables management?

15.                        The firms A and B are identical in all respects including risk factors expect for debt equity mix. Firm A has issued 12% debentures of Rs. 15 lakhs while B has issued only equity. Both the firms earn 30% before interest and taxes on their total assets of Rs. 25 lakhs.

Assuming a tax rate of 50% and capitalization rate of 20% for an all-equity company, you are required to compute the value of the two firms using

i)                   Net Income Approach, and ii) Net operating Income Approach.

16.                        The earning per share of company are Rs 8 and the rate of capitalization applicable to the company is 10%. The company has before it an option of adopting a payout ratio of 25% or 50% or 75%. Using Walter’s formula of dividend payout, compute the market value of the company’s share if the productivity of retained earnings is

i)                   15%   II) 10% and iii) 5%.

4 x 10 = 40