EMBA

Topics: Finance, Corporate finance, Risk Pages: 5 (1527 words) Published: August 10, 2014
Examination Paper of Financial Management
IIBM Institute of Business Management
Examination Paper

MM.100

Financial Management
Subject Code-B-103
Section A: Objective Type & Short Questions (30 marks)




This section consists of multiple choice & Short Notes.
Answer all the questions.
Part One carries 1 mark each & Part two carries 5 marks each.

Part one:
Multiple choices:
1. The approach focused mainly on the financial problems of corporate enterprise. a. Ignored non-corporate enterprise
b. Ignored working capital financing
c. External approach
d. Ignored routine problems
2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period.
a. Cumulative preference shares
b. Non-cumulative preference shares
c. Redeemable preference shares
d. Perpetual shares
3. This type of risk arises from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes.
a. Political risk
b. Domestic risk
c. International risk
d. Industry risk
4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal.
a. Future cost
b. Specific cost
c. Spot cost
d. Book cost
5. This concept is helpful in formulating a sound & economical capital structure for a firm. a. Financial performance appraisal
b. Investment evaluation
c. Designing optimal corporate capital structure
d. None of the above
1
IIBM Institute of Business Management

Examination Paper of Financial Management
6. It is the minimum required rate of return needed to justify the use of capital. a. From investors
b. Firms point
c. Capital expenditure point
d. Cost of capital
7. It arises when there is a conflict of interest among owners, debenture holders and the management.
a. Seasonal variation
b. Degree of competition
c. Industry life cycle
d. Agency costs
8. Some guidelines on shares & debentures issued by the government that are very important for the constitution of the capital structure are:
a. Legal requirement
b. Purpose of finance
c. Period of finance
d. Requirement of investors
9. It is that portion of an investments total risk that results from change in the financial integrity of the investment.
a. Bull- bear market risk
b. Default risk
c. International risk
d. Liquidity risk
10. _____________ measure the systematic risk of a security that cannot be avoided through diversification.
a. Beta
b. Gamma
c. Probability distribution
d. Alpha
Part Two:
1. What do you understand by wealth maximization?
2. Discuss the concept of factoring.
3. Define Annuity.
4. What is the Difference between NPV and IRR?

END OF SECTION A

Section B: Case lets (40 marks)
2
IIBM Institute of Business Management

Examination Paper of Financial Management





This section consists of Case lets.
Answer all the questions.
Each Case let carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).

Caselet 1
Case1: Credit Decision - Agarwal Case
On August 30, 2006, Agarwal Cast Company Inc., applied for a $200,000 loan from the main office of the National bank of New York. The application was forwarded to the bank's commercial loan department. Gupta, the President and Principal Stockholder of Agarwal cast, applied for the loan in person. He told the loan officer that he had been in business since February 1976, but that he had considerable prior experience in flooring and carpets since he had worked as an individual contractor for the past 20 year. Most of this time, he had worked in Frankfert and Michigan. He finally decided to "work for himself" and he formed the company with Berry Hook, a former co-worker. This information seemed to be consistent with the Dun and Bradstreet report obtained by the bank According to Gupta, the purpose of the loan was to assist him in carrying his receivables until they could be collected. He...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Emba
  • Emba Essay
  • Thesis Emba Essay
  • EMBA Operation Management CS2 1 Essay
  • Iibm Emba Production and Operation Management Essay
  • Essay about Quality of Emba Program
  • Essay on Emba City Group
  • Essay about 133089876 EMBA Marketing Mgt

Become a StudyMode Member

Sign Up - It's Free