Maharashi Dayanand University (MDU) 2008 M.B.A Business Administration FINANCIAL MANAGEMENT - Question Paper

Q:1“Financial management is nothing but managerial decision making in asset mix, capital mix and profit
allocation.” Comment

Q:2 discuss the implications of wealth maximization objectives for
(i) Creditors, (ii) employees, (iii) management, and (iv) society.




Q:3 Why is the cash flow concept important for capital budgeting? How would treat depreciation, working capital
and salvage value in determine the cash flows?


Q:4 The basic formula to compute the cost of equity is :
D1 + g.
P0
discuss its rationale.

Q:5 discuss the position of M-M on the problem of an optimal capital structure, ignoring the corporate income
taxes. Use an Illustration to slow how home-made leverage by an individual investor can replicate the identical risk
and return as given by the levered firm

Q:6 elaborate the assumptions which underlie Gordon’s model of dividend effect? Does dividend policy affect the
value of the firm under Gordon’s model?




Q:7 What is the importance of working capital for a manufacturing firm? What shall be the repercussions if a firm
has (a) paucity of working capital (b) excess of working capital?


Q:8 discuss the objective of credit policy. What is the role of credit terms and credit standard in a credit policy of a
firm?

Earning:   Approval pending.