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Business studies Ch-9,10

Time :1hour

1. Which component of capital structure determines the overall financial risk? (1)
2. Identify the decision taken in financial management which affects the liquidity as well as the
profitability of business.
3. Amit is running an Advertising agency and earning a lot by providing this
service to big industries. State whether the working capital requirement of the
firm will be less or more. Give reason in support of your answer (1)

4. Why are Capital budgeting decisions considered as Irreversible decisions?(1)

5. Certain instruments of money market is short term self-liquidating & used to
finance credit sales name the instruments(1)

6. How does Secondary market contributes to Economic Growth?(1)

7. What are two benefits of allocative function of financial market?(1)
8. A Method of floating new issues does not deal directly to public but operates through
intermediaries like issuing Houses and brokers Name the Method. (1)
9. Is Financial planning and financial management synonyms or substitute to each other ?(3)
10. The directors of a company have decided to expand their business activities by modernising
th Plant and Machinery at an estimated cost of Rs. 50 lakhs. Name the decision and Explain
factors that you would consider while taking that decision.(3)
11. Supriyas grandmother who was unwell, called her and gave her a gift packet.
opened the packet and saw many crumpled share certificates inside. Her
told her that they had been left behind by her late grandfather.
As no trading is now done in physical form, Supriya wants to know the process by
adopting which she is in a position to deal with these certificates.
a) Identify and state the process.
b) Also give two reasons to Supriya why dealing with shares in physical form had
stopped.( 1+2)
12. Y Ltd. has invested Rs. 30 lakh and earns a profit before interest and taxes (EBIT)
of Rs. 2 lakh. Tax rate is 30%.
(a) Calculate earning per share (EPS) assuming that there is no debt.
(b) What would be EPS, if total capital of the company includes Rs 10 lakh, 10%
(c) Will EPS increase or decrease in case (b)? Explain the reason.

13. Financial Planning is essentially the preparation of financial blueprint of the organisation
future operations .The objective of Financial Planning is to ensure that enough funds are
available at right time . The management of Croma Ltd. Decided to raise funds through public
issue .Keeping in view the protective function executed by government agency ,the
management decided not to indulge in unfair trade practices.
a) State any one importance of Financial Planning
b) What will happen if enough funds are not available at right time
c) Name the government agency referred above .
d) Identify the value which is being emphasisized in the Financial Planning.(4)
14. Explain why SEBI is called watch dog of securities market ?