Theory of FM

7/30/2019 Theory of FM

1/5

May-2008

Answer the following questions

1) Contrast the salient features of the traditional and modern approaches of financial

management 4marks2) What is the rationale of financial intermediaries? 4marks

3) Highlight the difference between equity capital and debentures 4marks

4) Compare a right issue with a public issue 4marks5) Explain features and mechanics of factoring 4marks

Write a note on multi national corporations (MNCs) 10marks

Discuss the rationale for share buybacks 10marks

May-2006

Describe in detail the factors affecting working capital requirements 10marks

Net present value V/s IRR 10marks

Explain capital budgeting process 10marks

Write short notes

1) Initial public offer 7marks2) Short term sources of finance 7marks

3) Bonus shares 6marks

Maximizing value for shareholders is increasingly seen as a point of convergence of

many corporate objectives. Enumerate various approaches for value based management

and discuss in detail the following approaches 20 marks1) EVA approach

2) Marakon approach

May-2007

Compare and contrast the wealth maximization and profit maximization goals offinancial management 5marks

Discuss the major functions of the financial system 5marks

What are the pros and cons of debt financing? 5marks

Explain different kinds of dilution 5marks


2/5

Discuss the rationale objections and key regulations applicable to share buybacks

10marks

Highlight the difference between home currency approach and foreign currency approach

of international capital budgeting 5marks

Explain briefly the strategies available to a firm for managing surplus cash 5marks

Discuss the concept of just in time inventory control 5marks

May-2005

Answer the following

1) What are the three major functions of the financial manager? How are they related?

5marks

2) Discuss the functions performed by the financial system 5marks3) Explain the various methods of divestiture 5marks

4) Highlight the difference between financing foreign trade and domestic trade 5marks

Distinguish between gross and net working capital also permanent and temporary

working capital 10marks

What are the principal factors that can be varied in setting credit policy? 10marks

Describe the motives for holding cash. Also define the functions of cash management10marks

Factoring is emerging source of short term financing. Explain. 10marks

The equity shareholders of a company are its ultimate owners. Explain in the context of

rights of equity shareholder. 10marks

Define a stock dividend and stock split. What is the impact of each on share value?

10marks

Explain the pros and cons of IPO 10marks

It is said that only cash cost are relevant for capital budgeting decision. However,depreciation which is a non-cash cost is a prominent part of cash flow analysis for such

an investment decision. How do you explain this paradox? 10marks


3/5

LJIMS April-2008

Define financial management and discuss the goals of financial management. Is the

goal of share holders wealth maximization the ultimate goal? 10marks

Explain in detail the stand taken by Prof. Modigliani & Miller regarding the capital

structure theory and bring out its salient features. 10marks

What are the objectives of cash management? Describe Baumol Model and Miller

and Orr model 10marks

Short notes:1) International parity relationships 5marks

2) Initial public offer 5marks

3) Short term sources of finance 5marks

4) ALCAR approach in value based management 5marks5) Stern Stewart approach in value based management 5marks

CPIMR April-2007

Explain briefly the risk-return trade-off and its impact on market value of firm

10marks

Explain the Gordens model of dividend policy 10marks

Answer the following in brief 10marks

1) What is a capital market? How does it differ from money market?2) What is the relationship between the effective interest rate and the stated interest

rate?

3) Explain the three components of EVA calculation4) Is stable dividend payout ratio same as steadily changing dividends? Explain

how?

5) Explain the mechanics of issuing GDRs

Explain the special features of equity capital . Discuss the process involved in raising

funds through IPO. 10 Marks

List Long term sources of finance available to companies in India. Discuss important

features and pros & cons of debenture as a source of long term finance 6 Marks

Explain the salient features of NSE 3 Marks

Explain the different sources of working capital finance 5 marks


4/5

Explain Baumols Cash Model 5 marks

What are the effects of liberalizing the cash discount policy? 5 marks

Discuss the concept of Just In time inventory control 5 marks

Critically discuss Modigilani and Miller ( M&M) approach to the theory of capitalstructure 10 marks

Discuss the relationship between EBIT and EPS 5 Marks

Describe the forms in which Pre shiopment and post shipment finance are provided

5 marks


5/5

LJIMS April 2007

IRR competes with NPV as a technique of capital budgeting Justify and bring out

their deficiencies 10 marks

MM theory is a seminal contribution to modern theory of financial management

Justify and bring out differences between MM theory and pecking order theory of

capital structure 10 marks

ALCAR Approach 5 marks

International Parity relationship 5 Marks

Pipeline concept of Working Capital 5 Marks

Venture Capital 5 Marks

Documents

Theory of FM