DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
Fourth Semester
CORPORATE FINANCIAL MANAGEMENT
(Upto 2012-2013 Academic Year and 2013 Calendar Year)
(2005 onwards)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. What are the significance of financial management?
2. How shares differ from Debentures?
3. What are the various types of Working Capital?
4. What do you mean by Marginal Cost of Capital?
5. What do you mean by Arbitrage Process?
6. What do you understand by Relevance theory of
Dividend?
7. What are the various types of Dividends?
8. What are the merits of Equity Shares?
Sub. Code
45
DE-438
2
SP 5
SECTION B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Explain the functions of Financial Management.
10. Describe the various assistance provided by the financial
institutions.
11. Discuss the various theories of Working Capital.
12. Describe the concept of Weighted Average Cost of
Capital.
13. Explain the determinants of Capital Structure.
14. Company X and Company Y are in same risk class and
are identical in every fashion except that company X uses
debt while company Y does not. The levered firm has
Rs. 90,00,000 debentures, carrying 10% rate of interest.
Both the firms earn 20% before interest and taxes on
their total assets of Rs. 150 lakhs. Assume perfect capital
markets, rational investors and so on; a tax rate of 15%
for an all equity company.
Compute value of firm X and Y using NI and NOI
approaches assuming corporate tax rate being 50%
15. Following are the details regarding three companies
A Ltd, B Ltd and C Ltd.
Particulars A Ltd. B Ltd. C Ltd.
r 15% 10%
Ke 10% 10% 10%
E 80 80 80
Calculate the value of an equity share of each of these
companies applying Walter's formula when dividend
payment ratio is and 25%.