B.Com In Banking & Insurance (BCBI) Sem III 2022 2023 Oct 2023 FINANCIAL MANAGEMENT Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 A) Fillin the blanks. (Attempt any 8). 8 marks
   • 1. NPV considers of money helps the investors to decide the return on investment
   • 3. The Cost of loan is considered tax
   • 4. Higher the tax rate, the after tax cost of debt financing
   • 5. Credit sales are as cash payment remains unreceived
   • 6. Receivables may be represented by bills receivables or balance
   • 7. The formula of dividend pay-out ratio is
   • 8. shares are received by shareholders at free of cost
   • 9. Dividend is a distribution of
   • a)Net Profit b)Profit After Tax Profit Before Income of the company
   • 10. The abbreviation of NPV is
2. Q1 B) State true or false. (Attempt any 7). 7 marks
   • 1. Capital Budgeting decisions are long term decisions
   • 2. Investment decisions and capital budgeting are same
   • 3. Equity Investors are high risk bearers
   • 4. Cost of capital is used in Capital Budgeting decisions
   • 5. In a coinpetitive market, higher volume of sales is made on credit
   • 6. The working capital ratio or current ratio is calculated as current assets divided by current liabilities
   • 7. Financial managers and financial accountant have same functions
   • 8. Inventory are also termed as stock
   • 9. The traditional approach is relevance theory
   • 10. Debentures has fixed rate of interest
3. Q2 Determine the (a) Pay Back Period and (b) A.R.R. from the following information of a proposed Annual Profits after Tax and Depreciation VCD SYBBI SEM III FINANCIAL MANAGEMENT 2hrs 30 mins MARKS - 75 Charlie Company Ltd. wishes to buy a machine costing Rs. 2,00,000. The life of this machine 10 years and its scrap value would be Rs. 5,000, The following details are provided:
   • (1)Payback Period
   • (ii) [Accounting Rate of Return Method] j
4. Q3 Following are the details regarding the capital structure of a ABC Ltd. Types of Capital Book Value Rs Market Value Rs Specific Cost You are requested to determine the weighted average cost of capital, using 15 marks
   • (a) Book value as weights and (b) Market value as weights
5. Q3 A) Calculate market price of share as per walter model. (7) = Internal rate of return 20% Cost of Capital 16%
6. Q3 B) Calculate the Market Price of share as per Gordon Model. Internal Rate of Return 20% Cost of Capital 16% VCD___SYBBI SEM III FINANCIAL MANAGEMENT 2hrs 30 mins MARKS - 75 AB company needs 5,00,00,000 for the of a new plant, The following three financial plans are feasible: 8 marks
   • a) The company may Issue 50,00,000 ordinary sheres of Rs. 10 each
   • b) The company may issue 25,00,000 ordinary shares @ rupees 10 and remaining may be collected by issue of 2,50,000. Debentures of Rs 100 each bearing an 8% rate
   • c) The company may issue 25,00,000 ordinary shares @ 10 each and remaining amount as preference shares of rupees 10 each bearing an 8% rate of dividend If the expected EBIT, which the company may earn is Rs 40,00,000, then suggest which capital structure alternative the company should select. Assume tax rate to be 50%? The shares of the company are presently traded at Rs. 25 per share. It is expected that the company will earn post tax profits of Rs. 20 lacs (Income Tax rate assumed to be 40%). The company wishes to raise further funds of Rs. 50 lacs and has the following options:
   • (1) Issue new debentures and Preference shares in equal proportion
   • (2) Issue of preference shares to the extent of 25%, balance by way of debentures. (3) Issue new debentures carrying 14% interest rate. As a Financial Manager, which of the above proposal would you
   • A) Explain factors determining dividend policy. 8
7. Q5 B) State in brief any 3 functions of a finance manager. 7 marks
8. Q5 Write short notes, (Any 3) 15 marks
   • 2. Long term sources of finance
   • 3. Types of Preference Shares
   • 4. Objectives of Financial Management
   • 5. International Sources of Finance

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