B.B.A. LL.B. (Five Years) Sem 4 Financial Management 2013 Dec Question Paper - KSLU

Questions asked in this paper

UNIT - I

1. Q1 (a) A company has the following capital structure :
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2. Q1 OR Following is the capital structure of a company :
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3. Q1 (b) Write short notes on : significance of cost of capital.
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4. Q1 OR Write short notes on : Factors affecting weighted average cost of capital.
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UNIT - II

1. Q2 (a) A company has capital structure exclusively comprising of equity shares of Rs. 20,00,000. The firm now wishes to raise additional Rs. 20,00,000 for its expansion project. The firm has following four alternative financial plans.
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2. Q2 OR A company belongs to a risk class for which the appropriate capitalisation rate is 10%. It currently has outstanding 5000 shares selling at Rs. 100 each. The firm is contemplating the declaration of dividend of Rs. 6 per share at the end of the current year. The company expects to have a net income of Rs. 50,000/- and has a proposal for making new investments of Rs. 1,00,000/-. Show that under MM hypothesis, the payment of dividend does not affect value of the firm.
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3. Q2 (b) Explain the traditional approach of capital structure.
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4. Q2 OR Discuss factors affecting dividend policy.
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UNIT - III

1. Q3 (a) The following information is provided to you in respect of a company
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2. Q3 OR Explain the factors influencing the working capital requirements.
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3. Q3 (b) Explain motives for holding inventories.
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4. Q3 OR Explain in brief techniques of inventory control.
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UNIT - IV

1. Q4 (a) A company is planning to invest in a new machine costing Rs. 15,00,000/-. The cash flows associated with the machine are given below :
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2. Q4 OR A US MNC is planning to instal a manufacturing unit to produce 5,00,000 units of an automobile component in India. This involves an investment outlay of Rs. 50 million. The plant is expected to have a useful life of 5 years with Rs. 10 million salvage value. MNC will follow the straight line method of depreciation. To support the running of business, working capital of Rs. 5 million will have to be invested. Variable cost of production will be Rs. 20 per unit. Fixed cost per annum is estimated at Rs. 2 million. The forecasted selling price is Rs. 70 per unit. The MNC will be subjected to 40% tax in India. Its required rate of return is 15%. It is forecasted that the rupee will depreciate in relation to US$ @ 3% p.a.with an initial exchange rate of Rs. 48 per $. Advise the MNC regarding the financial viability of the project.
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3. Q4 (b) Write a note on management of working capital by an MNC.
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4. Q4 OR Explain factors influencing capital structure of an MNC.
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UNIT - V

1. Q5 (a) Company A wishes to takeover company B. The financial details of the two companies are as follows :
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2. Q5 OR Company X requires company Y. The position before take over was as follows :
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3. Q5 (b) Explain different types of mergers.
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4. Q5 OR What are the benefits of merger and acquisition ?
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Typed from the KSLU paper above. The paper is the original. Long reading passages are shortened here to their first and last lines and a summary.