FM BBA (H) 2024 Thoeoritical Parts

Unit-1
1. Explain the various functions of financial management.

2. Explain the relationship among financing decision, investment decision and dividend
decision.
3. What is value maximization objective of a firm? How does it differ from profit
maximization objective?
4. Specify the limitations of ‘maximization of profit’ as the objective of a firm.
5. Explain with example the compounding technique and the discounting technique in
relation to the time value of money.
6. Discuss the relationship between risk and return in the context of modern business
environment.
7. Explain the mechanics of calculating the present value of cash flows.
8. What are the basic financial decisions? How do they involve risk-return trade-off?
9. Differentiate between systematic risk and unsystematic risk.
Unit-2
1. State the significance of Capital Budgeting decision. Specify the distinguishing
features of capital expenditure decision.
2. Pay back period method of project evaluation is considered conceptually unsound. Do
you agree with this view? Critically discuss.
3. Explain the main feature, advantages and disadvantages of the following method of
project evaluation:
(i) Payback period;
(ii) Discounted payback period;
(iii) Accounting rate of return.
4. Mention any three importance of capital budgeting. How will you take accept-reject
decision under Net Present Value (NPV) method in case of evaluation of a proposed
project?
5. What is Modified Internal Rate of Return (MIRR) in the context of capital expenditure
decision of a firm?
6. What do you understand by Reinvestment Rate and what are its assumptions under the
Net Present Value and Internal rate of return method.
7. What is the profitability index method in the context of capital expenditure decision?
8. What do you mean by capital rationing?
9. How will you consider accept-reject decision under IRR method in case of evaluation
of a proposed project?
10. What do you mean by cost of capital? Mention any two significances of cost of capital.
11. Write short notes on:
(a) Marginal cost of capital;
(b) Capital asset pricing model
12. What is the rationale behind the use of weighted average cost of capital over specific
cost of capital in evaluating a project?
13. How will you determine the cost of equity share capital in a growth company?
14. What do you mean by explicit cost of capital and implicit cost of capital?
Unit-3
1. What do you mean by Optimum Capital structure? Discuss the features of an optimum
capital structure.
2. Discuss critically Modigliani and Miller approach of the capital structure theory.
3. What are the factors affecting capital structure?
4. What do you mean by over-capitalization and under-capitalization?
5. What are the differences between NI approach and NOI approach in capital structure
theory?
6. Critically examine the Traditional approach of capital structure theory.
7. Why is M.M.Model of dividend policy called dividend irrelevance policy?
8. Critically discuss Walter’s dividend model. To what extent are the shortcomings of this
model taken care of by Gordon’s dividend model?
9. What are the factors to be considered for paying cash dividend?
10. Give a brief note on Gordon’s dividend policy.
11. Explain the relation among fixed cost, risk and leverage.
12. What do you understand by operating leverage? How would you measure it?
13. Explain the relation among fixed cost, risk and leverage.
14. Define trading on equity. Give an example.
15. Define relationship between Margin of Safety (MoS) and Degree of Operating leverage.
16. What factors contribute to the operating risk and financial risk of a firm?
Unit-4
1. What do you mean by Working Capital Cycle? What are the factors on which the
duration of cycle depends.
2. What is ‘positive’ or ‘negative’ working capital? Explain its significance with the help
of an example.
3. What do you mean by permanent and temporary working capital of a firm?
4. What do you understand by gross working capital and net working capital? Give
examples.
5. Write a short note on Management of cash, Receivable Management.
6. What are the different techniques of cash management?
7. What are the objectives of receivable management?
8. How accounts receivable aging works?
9. What are the differences between default cost and delinquency cost?
10. Briefly explain ABC analysis with suitable example.

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Unit-1

1. Explain the various functions of financial management.

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