B.Com. (Financial Management) SEM II 2017 18 April 2017-18 PRIN.OF FIN Question Paper - Mumbai University | munotes

Questions asked in this paper

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1. Q1 A. Multiple choice question. (Any 8) (8M)
   • a. Financial planning is based on (forecasts, contingency, flexibility)
   • b. there are forms of capital structure popular and in practice. (four, three, two) sense includes share capital, reserves and debts. (narrow, broad, warranted)
   • d. Stamp duty loan is a type of loan. (education, gold, home)
   • e. Workmen compensation fund is an example of reserve. (specific, secret, general)
   • f. High promotion cost is the cause of . (overcapitalization, normal capitalization,
   • g. Working capital requirement is an example of plan. (long term, medium term, short refers to ability to withdraw more money than what is deposited. (bill shares are those shares which carry certain special or priority rights. ( equity, for approach. (new operating income, net operating inflows, net
2. Q1 B. State whether the following is true or false. (Any 7) (7M)
   • a. Determination of estimated life is difficult to ascertain
   • b. can be used for short- term as term financing Due to low profitability, reputation of company is lowered
   • d. Business risk is one of the criteria for determining capital structure
   • e. funds have to be ensured for smooth operations of an enterprise Financial management is not at all related with human resource management
   • g. important to maintain a liquidity position for a firm are a type of preference share
   • i. Debenture holders are the owners of the company Profit on sale of fixed assets is not an example of capital reserves
3. Q2 A. What is financial management? Explain its functions. (8 M)
   • B. What is financial planning? Enumerate and explain the basic considerations of financial planning?
   • Q.P. Code: 35201
4. Q2 Explain the importance of financial planning and also the steps involved in making a financial plan
5. Q3 A. Explain the factors determining capital structure. (8M)
   • B. What is under- capitalization? Explain its causes. (7M)
6. Q3 A. What is meant by over- capitalization? Explain its effects. (8M)
   • B. Distinguish between owned fund and owed fund. (7M) Also calculate, the value of owned and owed fund from the following information
7. Q4 A. Explain the advantages and disadvantages of debentures. (8 M)
   • B. What are the different types of preference shares? (7M)
8. Q4 A. Explain the types of reserves in detail. (8 M)
   • B. M/s. Ganesha Ltd. Has a share capital of Rs. 2,00,000 divided into 20,000 equity shares of Rs. 10 each fully paid. The company is planning to expand its business and thus requires further investment of Rs. 1,00,000. The management is having the below three alternatives. (7M)
   • i) Issue of 10,000 equity shares of Rs. 10 each
   • ii) Issue of 10,000, 10 % preference shares of Rs. 10 each
   • iii) Issue of 8% debentures of Rs. 1,00,000 Current EBIT are Rs. 4,00,000. Calculate the effect of each of the above modes of financing on EPS,
9. Q5 A. bonus shares and explain its merits and demerits. (8 M)
   • B. Explain the various types of bank loans offered by banks in India. (7M)
10. Q5 Short notes. (any 3) (15 M)
    • a. Types of financial planning
    • b.— Provision for depreciation
    • c. Equity shares
    • d. Remedies of under- capitalization
    • e. of a finance manager

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