6 th semester Financial Management (3201)

Financial Management (3201)

1. Define finance, business finance & financial management (2010)

2. Differentiate between NPV & IRR (2010/07)

3. NPV & IRR which is best? Why?(2010)

4. What is agency problem? When?(2010)

5. What do you mean by weighted average cost of capital (WACC) why & how is it calculated?(2010)

6. What is capital structure?(2010/09)

7. What are the factors that influence the capital structure decision?(2010)

8. Why should a financial manager concentrate primarily on wealth maximization instead of profit maximization as a goal of the corporation? Explain logically?(2010/08)

9. What are the major functions of financial managers?(2010)

10. How does the notion of risk and reward govern the behavior of financial managers?(2010)

11. What is CAPM?(2010/09/07)

12. What are the basic assumptions of it(CAPM)2010/09

13. What do you mean by portfolio?/what is portfolio assets?(2010/08)

14. Differentiate between portfolio risk & stand-alone risk(2010)

15. What do you mean by capital budgeting?(2010)

16. Write down the basics steps to be followed in capital budgeting process(2010)

17. Define discounted cash flow analysis?(2009)

18. What is APT?(2009/07)

19. Explain why the cost of new common stock is higher then the cost of retained earnings (2009)

20. What is significance of security market line?(09)

21. Can selection of optional portfolio be made?(09)

22. How will you estimate the cost of equity capital?(09)

23. How does it (COEC) differ from cost of preferred capital/stock?(09)

24. Explain the importance of trade credit as a source of working capital(09)

25. What is cost of trade credit? Explain (09)

26. What do you mean by working capital cycle (09)

27. What are the importance of working capital(09)

28. Define the receivable management (09)

29. Explain the objective of credit policy (09)

30. What is risk?(09)

31. How can risk of a security be calculated (09?)

32. How is the corking capital affected by (i) sales (ii) technology & production policy & (iii) inflation? Explain (09)

33. State the assumption of Walter’s theory of dividend policy (09)

34. Explain the importance of capital budgeting decision (09/08/07)

35. What are the disadvantages of internal rate of return (IRR)(09)

36. Cash management (09/08)

37. Marketable securities (09)

38. Internal rate of return (IRR)(09)

39. Net present value (NPV)(09)

40. Cash of retained earnings (09)

41. Short term finance (09)

42. Inventory management (090

43. How dose an investor choose his or her optimal portfolio from among the efficient set (08)

44. What are the primary differences between APT & the CAPM (08)

45. What are objectives of cash management? (08)

46. How is the riskiness of a portfolio measured (08)

47. What are some factors which effect business risk (09)

48. What is optimal capital structure under the MM model with corporate taxes (08)

49. Briefly describe how modified IRR (MIRR)is calculated .how it is differ with regular IRR(08)

50. Explain the factors that influence a firm’s dividend policy decision(08/09)

51. Define synergy (08)

52. Is synergy a valid rational for mergers? Describe several situations that might produce synergy gains (08)

53. Why is the SML a straight line(08)

54. What are the difference between the capital market line (CML)& the security market line(sml)(08)

55. What steps are involve in estimating the cash conversion cycle?(08)

56. Define mergers (08)

57. What are the essential differences between purchase & pooling method of accounting for mergers? (08)

58. define flotation cost, how does it affects of cost of capital (08)

59. Mention 3 factors that affect the cost of capital are generally beyond the firm’s control (08)

60. What are the basic assumptions of perfect capital market?(08)

61. What is mean by a perfect capital market (07)

62. What rule does the perfect capital market assumption play in financial theory?(08)

63. Define agency costs, what mechanism exists that encourage managers to act in the best interest of the shareholder (07)

64. Define & distinguish between systematic risk & unsystematic risk(07)

65. Properties of CAPM & APT (07)

66. Describe how NPV profiles are constructed (07)

67. Define business & financial risk (07)

68. Differentiate between the Modigliani & miller’s dividend theory & the Gordon’s board in the hand theory (07)

69. Define credit policy & explain the 4 credit variables (07)

70. What is credit scoring system (07)

71. What are some sources of credit information (07)

72. Define & discuss the 4 economic classifications of merger (07)

73. What is hostile takeover (07)

74. What are some defensive tactics that firm can use to resists hostile takeover attempts (07)

75. What is efficient frontier (07)

76. How investors chose his or her optimal portfolio from among the efficient set (07)

77. Differentiate between the yield to maturity & the yield to call (07)

78. What advantages does the MIRR have over the regular IRR in capital budgeting (07)

79. Why debt is considered as the cheapest source of finance (07)

80. Explain why the cost of new common stock is higher than the cost of retained earnings (07)