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No.

of Printed Pages : 6 MCO-07

MASTER OF COMMERCE
Term-End Examination
December, 2021

MCO-07 : FINANCIAL MANAGEMENT

Time : 3 hours Maximum Marks : 100


(Weightage : 70%)

Note : Attempt any five questions. All questions carry


equal marks.

1. (a) In what ways is the wealth maximisation


objective superior to the profit
maximisation objective ? Explain. 10

(b) Why is the consideration of time important


in financial decision-making ? How can time
be adjusted ? Illustrate your answer. 10

2. (a) What are the requirements of a good


method of capital budgeting decisions ? 10

(b) What is Net Present Value (NPV) method


and how does NPV change by variation in
discount rates ? 10
MCO-07 1 P.T.O.
3. (a) Define Cost of Capital. Explain its

significance in financial decision-making. 10

(b) Suppose the current market price of a

company’s share is < 90 and the expected

dividend per share next year is < 4·50. If the

dividends are expected to grow at a constant

rate of 8 percent, calculate the cost of equity. 10

4. Discuss the importance of working capital for a

manufacturing firm. What will happen if the

firm has (a) paucity of working capital, and

(b) excess of working capital ? 10+5+5

5. (a) What are the advantages of cash

management ? How does cash budget help

in management of a firm’s cash flows ? 6+6

(b) Define Economic Order Quantity (EOQ). How

is it calculated ? 4+4

6. What is project finance ? Distinguish it from

corporate finance. 5+15


MCO-07 2
7. (a) Discuss the features of an appropriate
capital structure. 10

(b) Describe the rationale for buyback of


shares ? 10

8. Two firms ‘A’ and ‘B’ have the following


information :
Sales Variable Cost Fixed Cost
(< Lakhs) (< Lakhs) (< Lakhs)
Firm A 1,800 450 900

Firm B 1,500 750 375

You are required to calculate (a) profit to sales


ratio, and (b) the degree of operating leverage for
both the firms. 20

9. Write explanatory notes on any two of the


following : 10+10

(a) Types of risks

(b) Primary and Secondary capital market

(c) Securitisation

(d) Dividend policy

MCO-07 3 P.T.O.
E_.gr.Amo.-07

dm{UÁ` _| ñZmVH$moÎma Cnm{Y


gÌm§V narjm
{Xgå~a, 2021

E_.gr.Amo.-07 : {dÎmr` à~ÝY

g_` : 3 KÊQ>o A{YH$V_ A§H$ : 100


(Hw$b H$m : 70%)
ZmoQ> : {H$Ýht nm±M àíZm| Ho$ CÎma Xr{OE & g^r àíZm| Ho$ A§H$ g_mZ
h¢ &

1. (H$) g§nXm H$mo A{YH$V_ H$aZm CÔoí` {H$g àH$ma go


bm^ H$mo A{YH$V_ H$aZo Ho$ CÔoí` go ~ohVa h¡ ?
ì`m»`m H$s{OE & 10

(I) {dÎmr` {ZU©`m| _| g_` H$m {dMma Š`m| _hÎdnyU© h¡ ?


g_` {H$g àH$ma go g_m`mo{OV {H$`m Om gH$Vm h¡ ?
CXmhaU g{hV CÎma Xr{OE & 10

2. (H$) EH$ CÎm_ ny±Or ~OqQ>J {ZU©` {d{Y Ho$ Amdí`H$


VÎd Š`m h¢ ? 10

(I) {Zdb dV©_mZ _yë` {d{Y Š`m h¡ Am¡a NPV H$Q>m¡Vr


Xa _| n[adV©Z go {H$g àH$ma ~XbVr h¡ ? 10
MCO-07 4
3. (H$) ny±Or H$s bmJV H$s n[a^mfm Xr{OE & {dÎmr` {ZU©`m|
_| BgHo$ _hÎd H$s ì`m»`m H$s{OE & 10

(I) _mZ br{OE H$ånZr Ho$ eo`a H$m dV©_mZ ~mµOma _yë`
< 90 h¡ Am¡a à{V eo`a AJbo df© àË`m{eV bm^m§e
< 4·50 h¡ & `{X bm^m§e H$s Ano{jV ñWm`r
(constant) d¥{Õ Xa 8 à{VeV h¡, Vmo B©{ŠdQ>r ny±Or
H$s bmJV kmV H$s{OE & 10

4. EH$ {d{Z_m©U \$_© H$s H$m`©erb ny±Or Ho$ _hÎd H$s MMm©
H$s{OE & Cg pñW{V _| Š`m hmoJm `{X \$_© H$s
(H$) H$m`©erb ny±Or H$_ h¡, Am¡a (I) H$m`©erb ny±Or
A{YH$ h¡ ? 10+5+5

5. (H$) amoH$‹S> à~ÝY Ho$ Š`m bm^ h¢ ? \$_© Ho$ amoH$‹S> àdmh
Ho$ à~ÝY _| amoH$‹S> ~OQ> {H$g àH$ma ghm`Vm H$aVm
h¡ ? 6+6

(I) Am{W©H$ AmXoe _mÌm (EOQ) H$s n[a^mfm Xr{OE &


`h {H$g àH$ma kmV H$s OmVr h¡ ? 4+4

6. n[a`moOZm {dÎm Š`m h¡ ? n[a`moOZm {dÎm H$s {ZJ_ {dÎm go


Š`m {^ÞVm h¡ ? 5+15

MCO-07 5 P.T.O.
7. (H$) Cn`wº$ ny±Or g§aMZm H$s {deofVmAm| H$s MMm©
H$s{OE & 10

(I) eo`am| Ho$ dmng H«$` Ho$ Am¡{MË` H$m dU©Z H$s{OE & 10

8. ‘A’ Am¡a ‘B’ Xmo \$_m] H$s gyMZm {ZåZ{b{IV h¡ :

{dH«$` n[adVu bmJV ñWm`r bmJV


(< bmI) (< bmI) (< bmI)
\$_© A 1,800 450 900

\$_© B 1,500 750 375

XmoZm| \$_m] H$m (H$) bm^ {~H«$s AZwnmV, Am¡a (I) n[aMmbZ
brdaoO H$s {S>J«r kmV H$s{OE & 20

9. {ZåZ{b{IV _| go {H$Ýht Xmo na ì`m»`mË_H$ {Q>ßn{U`m±


{b{IE : 10+10

(H$) Omo{I_ Ho$ àH$ma


(I) àmW{_H$ Ed§ {ÛVr`H$ ny±Or ~mµOma
(J) à{V^y{VH$aU
(K) bm^m§e Zr{V

MCO-07 6

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