V SEMESTER PART A FINANCIAL MANAGEMENT ANSWER ALL NINE QUESTION EACH Q CARRY 1 WEIGHTAGR What is dividend?

Define financial management? What is the goal of wealth maximization? What is capital structure? Explain capital budgeting? What is ARR? Give formula. Difference between capital structure and financial structures What is EPS? Explain leverage SECTION B Answer any five.{each question carry 2 weight age} 10 Explain the functions of Financial Manager 11 A company is proposing one projects A or B two projects are mutually exclusive. Investment required for each product is Rs. 15000. The cash inflow before deprecation for 5 years are A-4200, 4800,7000,8000,2000 B-4200, 4500, 4000,5000,10000 calculate payback period. 12 Explain the factors influencing capital structures? 13 Explain the various classification of cast of capital? 14 A Co issued Rs. 100000,7% preference shares of Rs.100 each at a premium of 10% redeemable after 5 years at par. Compute the cost of preference capital 15 Explain the factors determining dividend policy? 16 Explain the difference between operating leverage and financial leverage. SECTION C

1 2 3 4 5 6 7 8 9

17 Explain the determinants of cost of capital? 18 From the following information, calculate the net present value of the two project and suggest which of the projects should be accepted assuming a discount rate of 10%^ Project X Project Y

Initial Investment Estimate Life Scrap Value

20000 5 Years 1000

30000 5 Years 2000

The profits before depreciation and after taxes (cash flows) are as follows: Years 1 2 10000 10000 3 10000 5000 4 3000 3000 5 2000 2000

Project X Rs. 5000 Project Y Rs.20000

19 The following is the capital structure of A Ltd. Source Amount Rs. Cost of Capital Equity Capital (2, 00,000 shares of Rs.10 each) 20, 00,000 11% Preference Share Capital (50,000 Rs. Of Rs. 10 each) 5, 00,000 8% Retained Earnings 10, 00,000 11% 9% Debentures (Rs. 1000 each) 15, 00,000 4.5% Presently the debentures are being traded at 94%, preference shares at par and the equity shares at Rs. 13 per share. Find out the WACC based on book value weights and market value weights.

1. Pay back and ARR methods are----------methods (Capital budgeting, discounting, Nondiscounting, None) 2. Cost of capital is the --------------rate of return, expected by the investors (Normal, average, minimum, maximum) 3. Maximization of --------is the main objective of financial management (project, wealth, goodwill, revenue 4. Operating leverage deals with-----side of Balance sheet (asset, liability, both) 5. Capital structure affects-----risk of the company (Capital Risk, Business Risk, Financial Risk, Interest Risk) 6. IRR is rate at which NPV tends to------ (One, Infinity, Zero, less than are) 7. Which of the following function are not concerned with F.M. (Investment decision, financial decision, Dividend decision, Business Decision?)

8. Implicit cost is also called as------- (explicit cost, marginal cost, composite cost, opportunity cost) 9. Contribution= ----------------- Cost of Capital 10. CL = ____?___ X EBIT EBIT ?

11. --------------- is the additional cost incurred to obtain additional fund. 12. Profitability Index is also called as.