D.B.M. (Semester II) (CBCS) Examination Oct/Nov-2017
FINANCIAL MANAGEMENT
Day Date: Monday, 20-11-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
Instructions: Q. No. 1 is Compulsory.
Figures to the right indicate full marks.
Use of calculators is allowed.
Q.1 Choose the correct alternative. 07
Debentures are those debentures that are transferable by
delivery only.

Bearer Registered
Mortgaged Convertible
2 represents the hybrid form of financing.
Equity Debentures
Term Loan Preference share
3 Current assets do not
Raw Material Goodwill
Prepaid expenses Cash
4 Acid test ratio is also called as
Liquid Current
Working Capital Debt Equity
5 refers to that portion of company's net earnings that are
paid out to the equity shareholders.
Authorized Capital Dividend
Stock Split Paid up Value
6 is/are discounted technique of capital budgeting.
Profitability Index A B
Net present Value None of these
7 Shareholders enjoys Voting rights.
Equity A B
Preference None
Q.1 Fill in the blanks with appropriate word: 07
maximization are the goals of financial management.
Current Ratio
Current Liabilities
Net profit Ratio x 100
Sales
Sales Cost of Goods Sold
PI
shareholders are the last claimant of dividend and return
of capital.
shares are distributed as free of cost to existing shareholders.
Page 2 of 2
SLR-CE-10
Q.2 Attempt (Any 14
Discuss Preference Shares in detail.
Bonus Shares.
Structure of Finance department.
Q.3 Attempt (Any 14
C alculate PBP and ARR.
Cost of Machine 4,00,000
Estimated Life: 5 Years.
Scrap Value: Nil
Tax Rate: 50%
Year CFAT
1 90,000
2 1,15,000
3 1,65,000
4 2,40,000
5 1,40,000
C urrent Ratio: 3.25
Liquid Ratio: 2.75
Net Working Capital: 6,75,000
Bank Overdraft: 75,000
Calculate: Current Assets, Current Liability, liquid Liability and Stock.
P ay Back period
Q.4 Prepare an estimate of working capital requirement from the following
information of a trading concern:
14
Project annual sales 1,00,000 units.
Selling Price Rs. 8 Per Unit.
Percentage net profit on sales 25%
Average credit period allowed to customers 8 weeks
Average credit period allowed by suppliers 4 weeks
Average stock holding in terms of sales requirement 12 weeks
Allow for 10% for contingencies.
OR
Define Financial Management. Explain the importance objectives of financial
Management.
Q.5 Explain dividend policy. Also explain the determinants of dividend policy. 14
OR
Define Equity Shares. Explain in detail features of equity shares.