LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.A. DEGREE EXAMINATION – ECONOMICS
SIXTH SEMESTER – APRIL 2012
EC 6602 – FINANCIAL MANAGEMENT
Date : 20-04-2012 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
PART – A
Answer any FIVE questions in about 75 words each: (5 ´ 4 = 20 marks)
- State the goals of financial management.
- Define partnership.
- What is financial market?
- If a person invests Rs.5,000 at 12% compounded annually for three years,
calculate the compounded value after three years.
- Define costs of debt.
- What is ‘preference shares’?
- Write a note on companies Act.
PART – B
Answer any FOUR questions in about 250 words each: (4 ´ 10 = 40 marks)
- Explain the nature and scope of business finance.
- Discuss the SEBI guidelines for debentures.
- Analyse the functions of a financial system.
- Explain the methods of long term securities valuation.
- Describe the explicit and implicit costs.
- Write a note on industrial policy.
- Analyse the application of present value technique in finance.
PART – C
Answer any TWO questions in about 900 words each: (2 ´ 20 = 40 marks)
- Explain the emerging role of financial managers in India.
- Discuss the relevance of indirect tax structure on companies in India.
- Critically analyse the functions of various financial institutions in India.
- From the capital structure of a company given below, calculate the overall cost of capital, using (a) Book Value Weights; b) Market Value Weights.
Source Book value Market value
Equity Share Capital (Rs.10 share) Rs.45,000 Rs.90,000
Retained Earnings Rs.15,000 –
Preference Share Capital Rs.10,000 Rs.10,000
Debentures Rs.30,000 Rs,30,000
The after tax cost of different sources of Finance; Equity 14%; Retained Earnings 13%;
Preference share 10% and Debentures 5%.
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