SU&IECT CODE: 398

2o.2o

Cotporate Financer Business Economics

and Taxation (PaPer VII)
Time : 3 Hours Maximum Marks : 300

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SPECIFIC INSTRUCTIONS
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(i) Candidates have to attempt all questions.

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(ii/ Marks carried by each question are indicated at its end.

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Q

1. Variation in capitalizatrort may be inferred as a force to ease tension on giving

enterprise a tool to pursue its purpose. In this context, discuss various reasons
for changes in capitalizatton. (Not more than 5OO words)
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2. Encouragement of micro finance is inevitable for faster economic growth -

Elucidate.(Not more than 5OO words)
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(5oo ddrleri eoeddod erudox) [301

398/Corporate Finance, Business Economic & Taxetion (Paper VII) (1) P.T.O.
3. Can Union Crovernment of India levy taxes on only agricultural income? Justiry
your answer. (Not more than 25O words)
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4. Write a note on Bond. Explain Qpes of Foreign and Indian Bonds. (Not more than
5OO words)

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5. XY Limited needs Rs. 10,OO,OOO for the establishment of a new factory. The new
factory is expected to yield an annual EBIT of Rs. 1,60,000. In choosing a financial
plan, XY Lirrited has an objective of maxirnising earnings per share. It is considering
the possibility of issuing equity shares and rising debt of Rs. 1,OO,OOO or Rs. 4,OO,00O
or Rs. 6,O0,O0O. The current market price per share is Rs.25 and is expected to
drop to Rs.2O, if the funds are borrowed in excess of Rs.S,OO,OOO. Funds can be
borrowed at the rates indicated below:

Up to Rs.1,OO,O0O at 8%
Over Rs. 1,00,OO0 to Rs 5,OO,O0O at L2o/o
Over Rs. 5,00,OOO at 18%
Assume a tax rate of 50o/o. Determine the EPS for the three financing
alternatives.
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398/Corporate Flnerce, BuslnGss Ecolromlc & Taretlon (Papcr vnl (2t P.T.O.
 6 Explain various ethical issues related to business. (Not more than 25O words)
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7. Explain the provisions relating to set off and carry forward of losses of companies.
(Not more than 25O words)

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8. Defrne Savings. Is there any relationship among consumption, savings and

investment pattern in determining the growth of an economy? (Not more than
25O words)

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9. Briefly explain the various investment evaluation techniques. (Not more than
25O words)

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1O. Defrne macro-economics. Bring out the importance of macro-economics and its
interface with business and industries. (Not more than 5OO words)

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11. 'Ihe profit maxi:nization is not an operationally feasible criterion." Do you agree?
Illustrate your views. (Not more than 25O words)
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12. What are the functions of Reserve Bank of India in controlling the credit creation
and credit control? (Not more tJlan 25O words)

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398/corporatc Flanncc, Bualtro33 Ecotronlc o Trrruorl (PapGr vIIl (3) P.T.O

13. Discuss the role of SEBI in setting up of laws for the welfare of the investors.
Explain the Clause 49 of SEBI on Listing Agreement. (Not more than 25O words)
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14. Analyze the impact of social and cultural factors on the Indian business in global
context. (Not more than 25O words)

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15. Define multiplier. Bring out the significance and limitations of multiplier.
(Not more tllan 25O words)
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398/Corponte Flnertcc, BuslEe.s Economlc & Texatlon (P8pcr vu] (4) UU2O