DISTANCE EDUCATION
M.Com. DEGREE EXAMINATION, DECEMBER 2017.
FINANCIAL MANAGEMENT AND CONTROL
(2005 onwards)
Time Three hours Maximum 100 marks
SECTION A — x 8 40 marks)
Answer any FIVE questions.
1. Describe the score of financial management.
2. What is meant by public deposits? Explain the scope and
regulations of public deposits.
3. What are the needs for working capital?
4. Explain the optimal capital structure.
5. What are the basic functions of cash management?
6. Distinguish between equity shares and debentures.
7. Describe the technique of ABC analysis and explain its
merits.
8. Explain the factors that influence the dividend policy of a
firm.
SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. Discuss the functions and approaches of financial
management.
10. Explain the dangers of having excessive working capital
in a firm.
Sub. Code
21
DE-2695
2
wk4
11. ABC Ltd has an EBIT of Rs. 1,60,000. Its capital
structure consists of the following securities
10% Debentures Rs. 00,000
12% Preference Shares Rs. 1,00,000
Equity shares of Rs. 100 each Rs. 4,00,000
The company is in the 55% tax bracket, you are required
to determine
The company's EPS
The percentage change in EPS associated with 30%
increase and 30% decrease in EBIT.
12. What do you mean by weighted average cost of capital?
Explain its significance.
13. Describe briefly the risks and costs of holding inventory.
14. What is meant by leverage? How is the degree of financial
leverage and operating leverage measured?
15. Explain the Modigliani Miller hypothesis of dividend
irrelevance. Does this hypothesis suffer from deficiencies?
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