‘Time: 3 Hours Note: 1) Section-A contains Six questions 2) Section-B consists of Four Sub-secti SECTION. A Ques 1) Write brieny: 9) What is the need of financial manager? Ans: Need/Role of Financial Manager Refer Unit-1, Chapter 1, Page No. 19 ‘Ques 1b) What are the limitations of agency cost? Ans: Limitations of Agency Cost Refer Unit-2, Chapter 4, Page No. 71 Ques 1 ©) How leasing differ from hire pure transaction? Ans: Out of Syllabus Ques 1 d) Discuss in detail venture capital. Ans: Out of Syllabus Ques 1 ¢) Define risk and return, ‘Ans: Out of Syllabus Ques 1 ) What do you mean by financial structure? Ans: Refer Unit-2, Chapter 4, Page No.56 SECTION - B UNIT-I | Ques 2) Define scope of Financial Management. What role should the financial manager perform in a modern | enterprise? Ans: Scope of Financial Management Refer Unit-1, Chapter 1, Page No. 15 Role of Finance Manager in Modern Enterprise Refer Unit-1, Chapter 1, Page No. 18, Ques 3) The market price of a 1,000 par value bond carrying a coupon rate of 14 per cent and maturing after 5 years is €1,050. What is the yield to maturity on this bond? What is the approximate YTM? ‘Ans: Refer Unit-1, Chapter 3, Page No.S0 "MBA Second Semester (Corporat Finance and Indian Financial System) IKG PUNJAB TECHNICAL UNIVERSITY WBA SECOND SEMESTER EXAMINATION, 2015 FINANCIAL MANAGEMENT carrying S marks each and student has to attempt any Four questions. ms ~ Units-L, If, IIT and TY. Each sub-section contains Two questions Seaton Canes ATES each and student has to attempt any One quastlon from each sub-section, * Sestion-C ls compulsory and consist of One Case Study cac-yieg Serre, ‘Max. Marks: 60 UNIT-1 ‘Ques 4) How does discounting and compounding helps in determining the sinking fund and capital recovery? Ans: Discounting and Compounding helps in Determining the Sinking Fund and Capital Recovery Refer Unit-1, Chapter 2, Page No, 32 Ques 5) The expected cashflows of a project are as follows: ear (Cashion oa" | a fos aaal ie 10.00 0,000 90,00] 4000050, 000)30 00) The cost of capital is 12%. Calculate the net present value, internal rate of return, modified internal rate of return, pay-back period and discounted pay-back period, ‘Ans: Refer Unit-2, Chapter 5, Page No.95 UNIT. AY Ques 6) What do you mean by capital structure? Discuss in detail theories of capital structure with the help of examples. ‘Ans: Meaning of Capital Structure Refer Unit-2, Chapter 4, Page No, 56 Capital Structure Theories Refer Unit-2, Chapter 4, Page No, 58 1) What should be the optimum payout ratio of the firm? 4) What should be the price of the share at this Payout?md MBA Second Semester (Corporate Finance and indian Financial PUNJAB TECHNICAL UNIVERSITY MBA ~ SECOND SEMESTER EXAMINATION, 2016} FINANCIAL MANAGEMENT SSS] eS Max. Marks: 60 ‘Time: 3 Hours Note: 1) Section-A contains six questions carrying 5 marks each and students has to attempt any Four questions. 2) Sections-B consists of four sub-sections: Units-1, ll, Hl and TV. Each sub-section contains two questions gach carrying 8 marks each and student has te attempt any One question from each sub-section. 3) Section-C is compulsory carrying 8 marks. SECTION - A ‘Ques 1) What is the need of financial manager? Ans: Need of Financial Manager Refer Unit-1, Chapter 1, Page No. 19 Ques 2) What are the limitations of agency cost? Ans: Limitations of Agency Cost Refer Unit-2, Chapter 4, Page No.71 Ques 3) How equity capital differ from preference capital? ‘Ans: Out of Syllabus Ques 4) Discuss in detail ~ venture capital. Ans: Out of Syllabus Ques 5) Define operating leverage. Ans: Out of Syllabus ‘Ques 6) What do you mean by inventory management? ‘Ans: Out of Syllabus SECTION - 8 UNIT-I Ques 7) Discuss in detail objective, function and scope of financial management. What have been the key developments and reforms of the Indian financial sector since 1990? Ans: Objectives of Financial Management Refer Unit-1, Chapter 1, Page No.12 Functions of Financial Management Refer Unit-1, Chapter 1, Page No. 14 Scope of Financial Management Refer Unit-1, Chapter 1, Page No. ‘Key Developments in Indian Financial Sector Refer Unit-4, Chapter 8, Page No. 150 ‘Ques 8) What do you mean by long-term financial resources? Discuss in detail method with which you can mobilises your financial resources. ‘Ans; Out of Syllabus UNIT- Ques 9) How is the rate of return on an assets is defined? What is the relationship of risk and return as per CAPM? ‘Ans: Out of Syllabus Ques 10) The expected cashflows of a project are as follow 0 | 2a sean |-1,00,000|20,000|30,000| 40,000) 0,000|30,000| ‘The cost of capital is 12%. Calculate the net present value internal rate of return, modified internal rate of return payback peried and discounted payback period. Ans: Refer Unit-2, Chapter 5, Page No.95 UNIr-IT Ques 11) What do you mean by capital structure? Discuss in detail theories of capital structure, ‘Ans: Meaning of Capital Structure Refer Unit-2, Chapter 4, Page No. 56 Theories of Capital Structure Refer Unit-2, Chapter 4, Page No. 58 Ques 12) Write down the following: A) Traditional theories of dividend policies. Ans: Traditional Theories of Dividend Policies, Refer Unit-3, Chapter 6, Page No, 118, Ques 12 B) Implications of financial leverage. ‘Ans: Out of Syllabusage No. 121PUNJAB TECHNICAL UNIVERSITY BA - SECOND SEMESTER EXAMINATION, 2017) FINANCIAL MANAGEMENT te SSS SSS ime: 3 Hours Note: J) Section-A contains six questions carrying § marks each and students has to attempt any Four questions, 2) Section-B consists of four ‘subsections ~ Unite, I, Ill and IV. Each Subsection contains two questions each carrying 8 marks each and student has to attempt any One question from each sul S +) Section-C is compulsory and consists of One eae study carrying 8 marks. SECTION-A ‘Ques 1) Define financial management, ‘Ans: Meaning and Definition of Financial Management Refer Unit 1, Chapter 1, Page No. 11 ‘Ques 2) What are the limitations of private placement? ‘Ams: Out of Syllabus ‘Ques 3) How equity capital differ from preference capital? Ans: Out of Syllabus ‘Ques 4) Discuss in detail venture capital A ut of Syllabus ‘Ques 5) Define operating leverage. Ans: Out of Syllabus ‘Ques 6) What do you mean by financial Ans: Out ofSylabus SECTION-B UNIT Ques 7) Discuss in detail objective, function and scope of financial management. What have been the key developments and. reforms of the Indian Gnancil Sector since 1990? Ans: Objectives of Financial Management Refer Unit-1, Chapter 1, Page No.12 Functions of Financial Management Refer Unit-1, Chapter 1, Page No. 14. ‘Scope of Financial Management Refer Unit-1, Chapter 1, Page No. 15 Key Developments in Indian Financial Sector Refer Unit Chapter 8, Page No-150 ‘Max. Marks: 69 Ques 8) What do you mean by long-term financial resources? Discuss in detail method with which you can mobilise your financial resources. ‘Ans: Out of Syllabus UNIT Ques 9) How is the rate of return on an assets is defined? What is the relationship of risk and return as per CAPM? Explain the principle of dominance, Define the efficient portfolio, Ans: jut of Syllabus. Ques 10) The expected cashflows of a project are as follows: [Wes “0 [1 (20) ee |Cashflow]-1,00,000|20,000|30,000|40,000]50,000)30,000| ‘The cost of capital is 12%. Caleulate the net present value, internal rate of return, modified internal rate of rerum Pay-back period and discounted pay-back period. ‘Ans: Refer Unit-2, Chapter 5, Page No.95 UNIT Ques iy) Explain the position of M-M on the issue of corpeetimum capital structure, ignoring the orporate Income taxes. Use an ilistraton to sham ‘age by an individual investor can replicate same risk and return ean ind return as provided by Ans: Position of M-M on the Capital Structure, Ign Taxes Tssue of an Optimum wring the Corporate Income Refer Unit 2, Chapter 4, Page No. 66 An illustration of home-made: investor can replicate. by the levered firm/Arbitrage ProcessNote: 1) SectionA contains Six questions. each 3) Section-C is Compulsory carrying Eight marks. SECTION-A Ques 1) “Financial management is in many ways an integral part of the jobs of the managers.” Comment, ‘Ans: Refer Unit 1, Chapter 1, Page No.11 ‘Ques 2) Write a note on Initial public offering. Ans: Out of Syllabus ‘Ques 3) Discuss multiple fows and annuity. ‘Ans: Refer Unit 1, Chapter 2, Page No.24825 ‘Ques 4) Explain net income approach to capital structure. ‘Ans: Refer Unit 2, Chapter 4, Page No.58 ‘Ques 5) Discuss the benefits of investments. ‘Ans: Refer Unit 2, Chapter 5, Page No-76 ‘Ques 6) What isthe cost of maintaining receivables? ‘Ans: Out of Syllabus Section-B SUB-SECTION-1 Ques 7) Explain the concept of leasing and hire purchase. Bring out the key differences in the two ‘Ans: Out of Syllabus ‘Ques 8) A firm issues bond of face value of €1,000 of 10 ‘years maturity with 12% coapon rate and semi-annual interest payouts. Assuming your annual required rate ‘of interest to be 14% determine the present value of the bond by following two methods: a) Discount the semi-annual interest payments and the ‘maturity value with 7% semi-annual rate of return, ») Discount the semi-annual interest payments with 7% semi-annual discount rates and discount the maturity value with 14% annual discount rate. Ans: Refer Unit 1, Chapter 3, Page No.48 SUB-SECTION-I Ques 9) Define risk and return, How are these measured. Examine relationship between risk and return in the context of portfolio management taking 2 hypothetical case of two securities. Ans: Cut of Syllabus ‘Questions carrying Five marks each and students have to attempt any four 2) Section-B consists of Four Subsections: Units-1, 1, Il and IV. Each Subsection contains Two questions carrying Eight marks each and student has to attempt any One question from each Subsection, Max. Marks: 69. ‘Ques 10) Write a note on the following: a) Evaluating projects with unequal life. Ans: Out of Syllabus ‘Ques 10 b) Capital rationing. Ams: Refer Unit 2, Chapter 5, Page No.100 ‘Sub-Section-IIT Quesi1) Discuss the concept of operating leverage, financial leverage and total leverage using hypothetical examples. ‘Ans: Out of Syllabus ‘Ques 12) From the following information, calculate: ) The market value per share as per Walter Model, b) Optimum dividend payout ratio as per Walter Model and the market value of company’s share at that Payout ratio. [earnings ofthe company 850,000 Dividend payout ratio 60%, Number of shares outstanding | 1,00,000 | Hauity capitalisation ratio [129% ‘Rate of return on investment | 189% ‘Ans: Refer Unit 3, Chapter 6, Page No.110 SUB-SECTION-IV Ques 13) Discuss the nature and role of inventory in working capital management. Also explain various types and costs of inventory. ‘Ans: Out of Syllabus Ques 14) Write a detailed note ing current on financing Ans: Refer Unit 3, Chapter 7, Page No.138 SECTION.C Ques 15) A firm has a capital budget of 2100 which ‘must be spent on one of two projects, each requiring & resent outlay of €100. Project A yields a return 0 1120 after one year. Whereas Project B yields €201. after § years. Calculate: {) The NPV of each project