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II Semester BA7202 Financial Management

Question Bank
UNIT I - 2 MARKS
1. Define Financial Management. (2015, 2012, 2014, 2006)
2. What is meant by financial planning? (2015,)
3. What is time value of money?(2015, 2014, 2013, 2012, 2007)
4. What are the functions of finance? (2009)
5. What are the basic financial decisions? (2012, 2003)
6. Explain compound value concept (2014)
7. What are the objectives of financial Management? (2010, 2005)
8. What is present value? (2014)
9. What is meant by Yield to Maturity (YTM)? (2015)
10. What is the scope of financial management? (2013, 2006)
11. Distinguish between call option and put option? (2013)
UNIT I -16 MARKS
1. In what ways is the wealth maximisation objective superior to the profit maximisation objective?
Explain.(2015, 2014)
2. Explain the concept of time value of money, discuss its techniques.(2015,2012)
3. What is risk? How can risk of a security be calculated? Explain your answer with an example.
(2015)
4. Discuss in detail the functions of financial management and the role of financial
manager.(2015,2012,2004)
5. Explain how an investor realises an interest when he purchases a zero coupon bond? (2014)
6. Distinguish between the risk and return of a single asset and that of a portfolio. (2012)
7. Define an option and explain briefly the Black Scholes option model. (2012)
8. Explain the role of finance manager. (2013)
9. What happens to the value of perpetuity when interest rates increase? What happens when interest
rate decrease? (2013)
10. What are the general principles of valuation of shares? Explain.(2014)
11. Explain the various concepts of value. State the formula for bond valuation. What is the
relationship between coupon rate, required yield and price? (2012)
UNIT II 2 MARKS
1. What is meant by capital rationing? State the principles of capital rationing.(2015, 2014,2013,
2012).
2. Define capital budgeting. (2015, 2013, 2008,2007)
3. What are the objectives of capital budgeting? (2013,2012)
4. Give any two differences between NPV and IRR (2015, 2012)

5. What is cost of capital? (2015)


6. How would you calculate pay - back period? (2013)
7. What do you mean by weighted average cost of capital? (2012)
8. What are the various methods of evaluating capital budgeting proposals? (2014)
9. State the merits of profitability Index?
10. What do you meant by the term Required rate of return?
11. What is meant by opportunity cost of capital?
UNIT II -16 MARKS

1. List out the different techniques of capital budgeting? OR What are the various methods of
evaluating capital budgeting proposals? (2015,2012)
2. Critically examine the different approaches to calculation of cost of equity capital.(2015)
3. What is the overall cost of capital? How is the overall cost of capital determined? What weights
should be used in its calculations? (2014).
4. Explain the various factors influencing capital expenditure decisions.(2012)
5. How is cost of equity capital determined under CAPM? Explain. (2012)
6. Capital expenditure decisions are by far the most important decisions in the field of management
Illustrate.(2014)
7. What is Modigilani Miller approach to the problem of cost of capital structure? Under what
assumptions do their conclusion hold good?(2014, 2007)
8. Write down the factors that determine the cost of capital of a firm.(2012)
9. Briefly explain the theories of capital structure? (2013)
UNIT III 2 MARKS
1. Write the importance of cost of capital (2015)
2. Define the term cost of debt capital (2015)
3. What is operating and financial leverage? (2015, 2013)
4. What is dividend? (2015)
5. Define optimum capital structure (2013, 2012)
6. Distinguish between scrip dividend and bond dividend.(2013)
7. Explain the concept of scrap dividend (2013)
8. What do you mean by share split? (2012, 2007)
9. Define the concept of dividend (2012)
10. What are the different forms of dividends? (2014)
11. What is composite leverage (2014)
UNIT III -16 MARKS
1.
2.
3.
4.

Explain the net operating income approach of capital structure. (2015)


Discuss the factors which determine the dividend policy? (2015,2014, 2013,2012)
Explain the three different types of leverages elaborately. (2015)
Illustrate how EBIT EPS analysis can be used to design the appropriate capital structure for a
firm. or define the term capital structure. Explain the EBIT and EPS analysis. (2015, 2012)
5. Distinguish between operating and financial leverage. Explain the scope of operating and financial
leverage analysis for a financial executive in corporate profit and financial structure.(2015,
2014,2013).
6. Explain the effects of bonus shares and share split on the EPS and Market price of share.(2014)

7. What factors should be considered in determining the capital structure of a company? Explain.
(2014, 2013)
8. Explain the impact of various combinations of operating and financial leverage. Which
combination is considered to be an ideal situation for a company? (2012)
9. What are the essentials of Walters dividend model? Explain the short comings.(2014)
UNIT IV - 2 MARKS
1. Define operating cycle (2015)
2. What is meant by net working capital (2015)
3. Define working capital. (2015)
4. What is trade credit? (2015)
5. What do you understand by 2/15, net,45? (2013)
6. What is cash cycle? (2013)
7. Write a note on commercial paper (2013,2012,2007,2004)
8. What are the types of working capital (2013)
9. What are the significance of factoring?(2013,2004)
10. What is factoring? What are the costs associated with it? (2012)
11. What do you meant by permanent working capital? (2012)
12. Define the term fixed working capital (2012, 2014)
13. What is cash budget? (2014)
UNIT IV -16 MARKS
1. What is the importance of working capital? Briefly explain the factors that determine the working
capital? OR Discuss the principles, needs and determinants of working capital to a manufacturing
firm. (2015, 2014, 2013, 2012)
2. What are the various techniques used for forecasting working capital requirement of a business?
Explain.(2015,2012)
3. Explain the various methods of controlling the cash inflows. (2015)
4. Define factoring. What are its types? Discuss the advantages and disadvantages. (2015)
5. Explain the following (2015)
a. Baumols Model
b. Delinquency cost
c. EOQ model
d. Just in Time Inventory policy
6. What are the objectives of receivables management? Discuss the role of credit policy variables in
the credit policy off a firm. (2013)
7. Write a note on commercial paper and bank finance. (2012)
8. What are the objectives of cash management and various basic problems in the cash management?
Explain.(2014)
9. Explain in detail the cash management models proposed by Baumol and Miller with their merits
and demerits.(2014)

UNIT V 2 MARKS
1. Define the term share. (2015)
2. List the various types of long term and short term sources of finance (2015,2012)
3. What is leasing? (2015)
4. What is venture capital? (2015)
5. What is meant by convertible debenture? (2013)
6. Explain the role of Indian capital market (2013)
7. What are the merits of lease financing? (2013)
8. Distinguish between redeemable and irredeemable debentures (2012)
9. What do you mean by term loan? (2012)
10. What do you mean by venture capital? (2012)
11. What are the sources of internal financing?(2014)
12. What are the key functions of venture capital?(2014)
UNIT V - 16 MARKS
1. Explain the various sources of long term finance.(2015, 2014, 2012)
2. What is issue management? Explain the various types of issues. (2015)
3. List out the various methods of issuing shares to the public in the New Issue Market or Primary
Market? (2013)
4. Explain the pre-issues and post issue activities of a merchant banker (2015)
5. Define Leasing. What are its essential elements? (2015)
6. Differentiate between a share and a debenture (2015)
7. Explain in brief the features of venture capital financing and the various financial instruments
through which venture capital investment is made. (2015, 2007)
8. What are the functions of Indian capital ,stock market and New Issues market? Explain briefly.
(2015, 2012)
9. Write short notes on the following:
a. Hire Purchase
b. Long term sources of finance (2015, 2012)
10. Briefly explain the functions performed by different players in the new issue market. (2014)
11. Differentiate between leasing and hire purchasing. Describe the essential elements of leasing and
characteristics of a hire purchase agreement. (2013)
12. Discuss leasing as best sources of long term finance for manufacturing industries. (2012)
13. Write short notes on (2012)
a. Hire Purchase
b. Leasing
c. Venture capital financing
d. Private equity
14. Briefly trace the development of venture capital in India (2013)
15. Describe briefly the SEBI regulations as to venture capital finance.(2014)
16. Discuss briefly the early and later stages of venture capital financing.(2012)
17. Briefly explain the steps in involved IPO Process(2014)