Bangalore University 2008 M.Com Commerce SECOND SEMESTER , - Question Paper

II Semester M.Com. Degree Examination, June 2008
(2007-08) (New Scheme)
COMMERCE
2.2 : Advanced Financial Management


Time : three Hours Max. Marks : 80


Instructions : 1) Ten ques. to be answered from part --A
2) 3 ques. to be answered from part --B
3) 3 ques. to be answered from part --C.


part -- A

1. ans any ten of the subsequent in about 3-4 lines every. every sub-question carries 2 marks.
(10X2=20)

a) describe finance function.
b) What is optimum capital structure ?
c) What is replaced internal rate of return (MIRR) ?
d) What do you mean by capital rationing ?
e) elaborate the non-conventional investments ?
f) Distinguish ranging from risk and uncertainty.
g) What is sensitivity analysis ?
h) What is a conglomerate merger ?
i) Distinguish ranging from a hostile takeover and a friendly takeover.
j) What is the significance of P/E ratio ?
k) elaborate financial derivatives ?
l) What is hedging ?


part -- B

ans any 3 of the subsequent. every ques. carries five marks.
(3X5=15)

2. State the assumptions of Modigliani and Miller's hypothesis on capital structure.
3. If an equipment costs Rs. 5,00,000 and lasts eight years, what should be the minimum annual cash inflow to consider if worthwhile to purchase the equipment ? presume that the cost of capital is 10 per cent. (Refer to discount factors provided in issue no 10, if necessary.
4. What is simulation approach to investment decision-making ? elaborate its pros and cons ?
5. What synergies do exist in
i) horizontal mergers and
ii) vertical mergers ?
6. elaborate the important economic functions performed by the derivative markets ?

part -- C

ans any 3 of the subsequent in about 3 pages every. every ques. carries 15 marks:

Earning:   Approval pending.