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    Model_Question_MCOM

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    Model questions for mcom students

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    Model_Question_MCOM

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    Model questions for mcom students

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    Model questions for mcom students

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    3 views3 pages

    Model_Question_MCOM

    Uploaded by

    jayshreepradhan22
    Model questions for mcom students

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Model Questions for M.

    Com 2013-14 Batches (Under CBCS)


    1st Semester
    Financial Management (1330300104)
    Time – 3 Hours Full Mark-70

    SECTION - A
    Answer any three of the following :( within 700-1000 words for theory question)
    (12×3=36)
    Q.1. Define the term Financial Management. Briefly describe the objectives and functions of
    financial management.
    Q.2. What is Accounting Rate of Return (ARR)? How it is calculated? Outline the merits and
    demerits of ARR.
    Q.3. Compute WACC of Elegant Ltd. from the following information:
    Sources of fund Amount(Rs.) Cost of Capital (%)
    Debt 15,00,000 5
    Preference Share 12,00,000 10
    Equity Share 18,00,000 12
    Retain Earnings 15,00,000 11

    Q.4. A company expects a net income of Rs.80, 000/-. It has Rs.2, 00,000/-, 8% debenture.
    The equity capitalization rate of the company is 10%.
    (a)Calculate the value of the firm and overall capitalization rate according to NI
    Approach. (Ignore Tax)
    (b) If the debenture will increased to Rs.3, 00,000/-, what shall be Value of the firm and
    overall capitalization rate?
    Q.5. Make the comparison between Walter’s model and Gordon’s model in relation to
    dividend decision of a firm.
    Q.6. From the following projects of Francisco Ltd. For the coming year, you are asked to
    determine the working capital needs of the company.

    Particulars Amount(Rs.)
    Annual sales 15,60,000
    Cost of production(including depreciation 12,50,000
    of Rs. 1,30,000)
    Raw material purchase 7,00,000
    Opening stock of raw materials 1,50,000
    Closing stock of raw materials 1,30,000
    Inventory norms:

     Raw materials:2 months


     WIP: ½ month
     Finished goods:1 month

    The firm enjoys credit of one month on its purchase and also extends credit of 1
    month to its supplier. It may be assumed that production is carried out evenly throughout
    the year and the minimum cash balance is to be maintained Rs.50, 000/-.

    SECTION - B
    Answer any three of the following: (within 400-500 words for theory question)
    (8x3=24)
    Q.1. Explain the emerging role of CFO of a firm in financial management.
    Q.2. A firm is considering two financial plans with a view to examine their impact on EPS.
    The total fund required for investment in asset is Rs.5, 00,000.
    Particulars Plan I(Rs.) Plan II(Rs.)
    Equity Shares(Rs.10 each) 1,00,000 4,00,000
    Debt(Interest @10% p.a) 4,00,000 1,00,000
    Total Finance Required 5,00,000 5,00,000
    No. of Equity Shares 10,000 40,000
    The earnings before interest and tax are assumed as Rs.50, 000, Rs.75, 000 & Rs. 1,
    25,000. The rate of tax is 50%. Comment which financial plan is better and why?
    Q.3. What is Trading on Equity? How does it help to maximize the equity earnings?
    Q.4 A project cost is Rs.16, 00,000 and is expected to generate cash inflow of Rs.8, 00, 000,
    Rs.7, 00,000 and Rs.6, 00,000 at end of each year for next 3 years. Calculate IRR on the
    basis of Trial and Error method.
    Q.5. What is receivable management? What are its objectives and benefits?
    Q.6. A firm considering an expenditure of Rs.60, 00,000 for expanding its operation. The
    relevant information is as follows:

    Particulars Amount
    No. of existing equity share 10,00,000
    Market value per existing equity share Rs.60
    Net earnings Rs.90,00,000
    Compute the cost of equity share capital and of new equity capital assuming that
    new shares will be issued at a price of Rs.52 per share and the cost of new issue will be
    Rs.2 per share.
    SECTION - C
    Answer any two of the following :( within 150-200 words for theory question)
    (5x2=10)
    (a) Net Present Value(NPV)
    (b) Stable dividend policy
    (c) B Ltd. Issued Rs.1, 00,000, 9% debenture at a premium of 5%.The cot of floatation and
    tax rate are 2% and 60% respectively. Compute the cost of debt.
    (d) EBIT= Rs.24, 00,000, Cost of debt= 8%, Cost of equity= 12%, tax rate= nil, Assume
    debt= Rs. 1, 00, 00,000. Using M-M Model, determine
     Firm’s Total market value.
     Firm’s value of equity.
     Firm’ leverage cost of equity.

    **********

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