SHORT ANSWER QUESTIONS FOR FINANCIAL MANAGEMENT

1. Give the scope of financial management.

2. What is the nature of capital budgeting decisions?
3. What is capital rationing?
4. What is time value of money?
5. What are public deposits?
6. What is operating lease?
7. What is financial leverage?
8. What is meant by cost of capital?
9. What is permanent working capital?
10. List down the sources of dividend pay-out?
11. List down the short-term sources of working capital?
12. What is meant by bonus shares?
13. What is share-swap ratio?
14. What are the types of dividend?
15. What is EVA?
16. What is meant by financing decisions?
17. Mention two limitations of accounting rate of return?
18. Explain financial risk?
19. Mention the utility of public deposits as a source of fund?
20. Discuss the relationship between debt financing and financial leverage?
21. What is a letter of credit?
22. Differentiate between bonus issue and stock-split?
23. Define the term ‘take-over’.
24. What is capital asset pricing model?
25. How cost of preference share capital is calculated?
26. What is dividend pay-out ratio?
27. Explain the concept of capital rationing?
28. Mention two advantages of lease financing?
29. Define economic value added in relation to shareholder’s value criteria?
30. What is the financial goal of a firm?
31. What are the main components of cash outlay of an industrial project?
32. What is the reason for averaging investment under average rate of return
method?
33. Compare debenture and equity share as a source of finance?
34. Distinguish between financial lease and operating lease?
35. Why cost of equity capital is usually higher than that of debt-capital?
36. What shall be the effect of sale of inventory on working capital position of a firm?
37. What is commercial paper?
38. What is stock-dividend?
39. How would you explain the difference between mergers & acquisitions?
40. Explain the concept of risk-free rate of return?
41. Distinguish between growing and declining firms in dividend theories?
42. What are retained earnings?
43. What is meant by a merger?
44. What is EBIT-EPS analysis of capital structure?
45. What are participative and non-participative preference shares?
46. What is cost-benefit ratio?
47. What is meant by amalgamation?
48. What is meant by IRR?
49. What is meant by PN Ratio?
50. Capital structure.
51. Equity shares.
52. Shareholder’s wealth maximization.
53. Leveraged buy-out.
54. Bonus shares.
55. Trading on equity.
56. Capital rationing.
57. Operating cycle.
58. Independent projects.
59. Cost of debt.
60. Average rate of return.
61. What is NPV?
62. What are convertible and non-convertible preference shares?
63. What are the right shares?
64. What are cumulative and non-cumulative preference shares?
65. What is lease deed?
66. What are the main components of cash outlay of an industrial project?
67. What is the reason for averaging investment under average rate of return method?
68. What is a debenture?