MB0045-FINANCIAL MANAGEMENT(MODEL QUESTION PAPER)

1. The most admirable Indian companies are .........................

and ................................. .
2. The three elements of financial management
are ................................ ,.................................. and financial decisions.
3. ................................. is to ensure the availability of capital investments to acquire
the real assets.
4. .................................................... means maximisation of the economic welfare of
its shareholders.
5. Shareholder's wealth maximisation is reflected in the wealth of
its ..................................... .
6. The core of ........................ approach evolved around the procurement of the least
cost fundsand its effective utilisation for maximisation of the shareholder's wealth.
7................................................................ is based on the cardinal rule of efficiency.
8. .................................................................... can be defined as the excess of present
value of cash inflows of any decision implemented over the present value of cash
outflows.
9. Through the process of ............................, wealth maximisation takes care of the
quantity of cash flows.
10. Debt is ........................... than equity.
11. ......................................... and globalisation has changed the dimensions of
business environment.
12. A .................................... has to consider capital structure, capital expenditure,
and cash flow.
13. Surplus is deployed through well-planned ............................... management.
14.The first step in financial planning is to establish ................................................... .
15.

Corporate

objectives

can

be

grouped

into

-.................................

and ................................ .
16.

There

are

three

methods

statement-...........................................................,

of

preparing

income

...................................................

and combination of these two.

17.

Capital

requirements

of

firm

can

be

grouped

into

...............capital

and....................... capital.
18. The ............................ policy of any good financial plan is to match the term of
the source with the term of investment.
19. ......................................... of a firm refers to the composition of its long-term
funds and its capital structure.

20................................. of a company is decided by the investors and the earnings of

a company.
21. Two theories of capitalisation for new companies are ...................................... and
........................................ .
22. ...................................................... is the value of a unit of money at different time
intervals.
23.

The

important

factors

contributing

are...............................................................,

time

prefernce

value
for

of

money

consumption

and .................... .
24. In the compounding technique, the ....................... values of all cash inflows at
the end of the time horizon at a particular rate of interest are calculated.
25. The compounding of interest can be calculated by ......................................... .
26. The expression (1+i)n is called .................................................................... .
27......................................... refers to the periodic flows of equal amounts.
28.

The

expression

((1+i)n-1)/i

is

called ............................................................................. .
29. ............................................ is a fund which is created out of fixed payments each
period, to accumulate for a future sum after a specified period.
30. The expression i /((1+i)n-1) is called ................................................... .
31.The ....................................................... of a future cash flow is the amount of the
current cash i.e., equivalent to the investor.
32. An annuity for an indefinite time period is called ............................... .
33. ........................................................ is the annuity of an investment for a specified
time at a given rate of interest.
34. ................................ is the process of linking risks with returns to determine the
worth of an asset.
35. The value of an asset depends upon the .................................... it is expected to
provide over the holding period.
36. A ....................... can be evaluated by the series of dividends or interests
payments receivable over a period of time.
37.The ............................................ of an asset is equal to the present value of the
benefits associated with intrinsic value.
38. .................................................................. is the amount a company receives if it
sells its business as an operating one.
39.Net worth= ........................ + .................................+ ............................................ .
40. Market value per share is generally ......................... than the book value per
share for profitable and growing firms.

41.......................................................... refers to the number of years after which the

par value becomes payable to the bond holder.
42. The Indian Companies Act restricts the issue of .............................................
bonds.
43............................................ measures the rate of return earned on a bond if it is
purchased at its current market price and the coupon interset is received.
44. .................... is the rate earned by an investor who purchases a bond and holds it
till its maturity.
45. When kd is greater than the coupon rate, the intrinsic value of the bond
is ................ than its face value.
46. A bond's price varies inversely with ...................... .
47. .................................................... of a share is associated with the earnings (past)
and profitability(future) of the company.
48. ................................................ of a share is the economic value of a company
considering its characteristics, nature of business and investment decisions.
49. Under ...................................................... approach , the value of an equity share
is the discounted present value of dividends received plus the present value of the
resale price expected when the share is disposed.
50.The

three

types

of

dividends

in

companies

are ............................................... , ....................................................................... and

changing growth rates of dividends.
51. The ............................................................... is the net worth of the company
divided by the number of outstanding equity shares.
52.The ................................................. ratio reflects the amount investors are willing
to pay for each rupee of earnings.
53...................................................... is the mixture of long term sources like
debentures, loans, prefernce shares, equity shares and retained eanings in different
ratios.
54. The ......................................... is the minimum rate of return of a company, which
must earn to meet the expenses of the various categories of investors who have
made investment in the form of loans, equity, etc.
55. The .......................................... is the discount rate which equates the net
proceeds from the issue of debentures to the expected cash outflows.
56. The ...................................................................................... model establishes a
relationship between the required rate of return of a security and its systematic risks
expressed as "beta".
57. According to dividend forecast approach, the intrinsic value of an equity share is

the sum of ............................................................ associated with it.

58.

The

capital

structure

of

the

company

should

be

within

the ............................................... .
59.The

capital

structure

of

company

should

generate ................................................................... to the shareholders.

60. The purpose of ........................ is to consider each component in proportion of
their contribution to the total fund available.