Download PTU ( I.K.Gujral Punjab Technical University (IKGPTU)) The Bachelor of Business Administration (BBA) 2020 December 4th Sem 77429 Financial Management Previous Question Paper
Total No. of Pages : 03
Total No. of Questions : 18
BBA (SIM) (Sem.?4)
FINANCIAL MANAGEMENT
Subject Code : BBASM-401-18
M.Code : 77429
Time : 3 Hrs. Max. Marks : 60
INST RUCT IONS T O CANDIDAT ES :
1 .
SECT ION-A is COMPULSORY cons is ting of TEN questions carrying TWO marks
each.
2 .
SECT ION-B cons ists of F OUR Sub-sec tions : Un its-I, II, III & IV.
3 .
Eac h Sub-section contains TWO questions each , carry in g T EN ma rks e ach .
4 .
Students have to atte mpt an y ONE ques tion from each Sub-section.
SECTION-A
Write short note on the following in 2-5 lines :
1.
What is the need of financial management?
2.
What are the limitations of traditional approach of capital structure?
3.
How Equity Shares differ from preference shares?
4.
What do you mean by capital budgeting?
5.
Define Unsystematic Risk.
6.
What do you mean by financial structure?
7.
Define liquidity.
8.
What do you mean net working capital?
9.
Define Combined Leverage.
10. What do you mean by dividend policies?
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SECTION-B
UNIT-I
11. In most large corporations, ownership and management are separated. What are the main
implications of this separation? Define the scope of financial management. What role
should the financial manager play in a modern enterprise?
12. Define the concept of finance. Discuss in detail relationship of financial management to
economics and accounting. What forces are prodding companies in India to accord greater
importance to the goal of shareholder wealth maximization? Comment on the emerging
role of financial manager in India.
UNIT-II
13. Define Capital Structure? Explain its significance in financial decision making. Distinguish
between the traditional and modern theories of capital structure. Which one should be used
for maximization of valuation of the firm and minimization of cost of capital? Why?
14. The capital structure of Adamus Ltd. In book value terms is as follows :
Equity capital (20 million shares, Rs.10 par)
Rs. 200 million
Preference capital, 12 percent (500,000 shares, Rs.100 par)
Rs. 50 million
Retained earnings
Rs. 350 million
Debentures 14 percent (1,200,000 debentures, Rs.100 par)
Rs. 120 million
Term loans, 13 percent
Rs. 80 million
Rs. 800 million
The next expected dividend per share is Rs.2.00. The dividend per share is expected to
grow at the rate of 12 percent. The market price per share is Rs.50.00. Preference stock,
redeemable after 10 years, is currently selling for Rs.85.00 per share. Debentures,
redeemable after 5 year, are selling for Rs.90.00 per debenture. The tax rate for the
company is 30 percent. Calculate the average cost of capital.
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UNIT-III
15. Define the concept of capital budgeting. Discuss in detail with the help of examples
techniques of budgeting. How decision tree analysis approach can be used in capital
budgeting decision?
16. There are two projects A and B . A has a service life of one years. The initial cash outlay
for both the projects assumed to be Rs. 20,000 each. The cash proceed from project A (at
the end of first year) amounts to Rs 24,000. The cash generated by project B at the end of
fifth year is likely to be Rs. 40,200. Assume that the required rate of return is 10 percent.
Compute and compare NPV and IRR of the two projects.
UNIT-IV
17. Define Dividend Policy. Discuss in detail theories of relevance and irrelevance theories of
dividend with the help of example.
18. Describe the concept of working Capital Management. What are the components of
working capital? Illustrate the profitability solvency tangle in the current asset holding.
NOTE : Disclosure of Identity by writing Mobile No. or Making of passing request on any
page of Answer Sheet will lead to UMC against the Student.
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This post was last modified on 15 February 2021