LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.A. DEGREE EXAMINATION – ECONOMICS
|
SIXTH SEMESTER – APRIL 2008
EC 6602 – FINANCIAL MANAGEMENT
Date : 23/04/2008 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
PART – A
Answer any FIVE questions in about 75 words each (5 x 4 = 20 marks)
- Define Sole Proprietorship
- What is Financial Management?
- What do you understand by “Sweat Equity shares”?
- Point out the difference between VAT and CENVAT.
- Rs.1,000 is invested at 10% compounded annually for three years. Calculate the compounded value after three years.
- A debenture holder is to receive an annual interest of Rs.100 for perpetuity on his debenture of Rs.1,000. Calculate the value of debenture if the rate of return is a) 15% & b) 10%.
- Define New Issue Ratio (NIR).
PART – B
Answer any FOUR questions in about 250 words each. (4 x 10 = 40 marks)
- Explain the role of a Finance Manager in the liberalized era.
- State the difference between Public and Private Limited Company.
- Differentiate between Debentures and Shares.
- What are the advantages and limitations of a cooperative society?.
- Discuss the Powers and Functions of SEBI.
- The current market price of a debenture of X Ltd is Rs.800 having a face value of Rs.1000. The debentures will be redeemed after 5 years. The debenture carries an interest rate of 12% p.a. Calculate yield on maturity.
- Mr. A holds an equity share giving him an annual dividend of Rs.20. He expects to sell the share for Rs.180 at the end of a year. Calculate the value of the share if the required rate of return is 12%.
PART – C
Answer any TWO questions in about 900 words each (2 x 20 = 40 marks)
- ‘Financial Management has changed substantially in scope and complexity in recent decades’ – Justify.
- Comment on common stock valuation. Mohan Ltd Co’s dividend per share next share is expected to be Rs.4 and it is expected to grow at a 6% rate forever. Assume that the appropriate discount rate is 14%. What is the value of one share?
- From the following capital structure of a company, 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 | 15,000 | – |
Preference Share Capital | 10,000 | 10,000 |
Debentures | 30,000 | 30,000 |
The after tax cost of different sources of Finance; Equity 14%; Retained Earnings 13%; Preference share 10% & Debentures 5% .
- Explain the detail the rational and significance of the concept of Time value of money. Illustrate with suitable examples.
Latest Govt Job & Exam Updates: