Beruflich Dokumente
Kultur Dokumente
306-Financial Management
Time: 1Hrs [Max. Marks: 15]
Note: All Questions are compulsory and figure to the right indicating their maximum marks.
(iii): When __________ is greater than zero the project should be accepted.
(a) IRR (b) PI (c) NPV (d) ARR
[Section B]
Q.2: What do you mean by NPV? Explain it merits and demerits 2
OR
Explain the Net Income approach (relevance theory) of capital structure.
[Section C]
Q.4 What do you mean by financial management? What is its objectives? 5
OR
The capital structure of Shobha Ltd. is as under: Rs.
2000, 6% Rs.100 debenture (first issue) 2, 00,000
1000, 7% Rs.100 debenture (second issue) 1, 60,000
2000, 8% Preference Shares of Rs.100 each 2, 00,000
4000, Equity Shares of Rs.100 each 4, 00,000
Retained Earnings 1, 00,000
The earnings per share (EPS) of the company in the past many years have been Rs.15. The shares of the
company are sold in the market at book value. The Company tax rate is 50% and shareholders tax liability is
25%. Find out the after tax weighted average cost of capital. 5