Sikkim-Manipal University of Health Medical and Technological Sciences (SMUHMTS) 2009 B.Com IS- BM0021 –Financial Management-Assignments fall session - Question Paper

Bachelor of Commerce in info System-V sem
BM0021-Financial Management- four credits
(Book ID-B0083)
Assignment Set 1- 60 Marks
ans all the ques.. every ques. carries 10 Marks.
1.Without proper administration and effective utilization of finance, no business enterprise can utilize its potentials for growth and expansion. explain

2.An investor can profitably employ a rupee received today to provide him a higher value to be received tomorrow or after a certain period. discuss.


3.Mr. Ramanathan deposited Rs.5000 at the end of every year for five years in his savings account paying 4% interest compounded annually. Determine how much sum of money he will have at the end of the fifth year.

4.X ltd has issued 8% preference shares of Rs.100 every. The preference shares are redeemable after five years. The improper capitalization rate is 8%.


5.Mr. Rao holds an equity share that provide him an annual dividend of Rs.20. He expects to the share price would be Rs.200 at the end of the year. compute the value of the share if the discount rate (required rate of return) is 12%. Should he hold / sell it?

6.Briefly discuss Capital Budgeting Process.









Bachelor of Commerce in info System
BM0021-Financial Management- four credits
(Book ID-B0083)
Assignment Set 2- 60 Marks
ans all the ques.. every ques. carries 10 marks
1.Higher the risk, higher will be the rate of return demanded by the suppliers of funds. Why is debt considered the cheapest source of finance?
2 a. Using the subsequent info compute cost of equity under CAPM model:
Risk free rate = 8%
Beta of security i (ß) = 1.25
Rate of return on Market Portfolio (Rm ) = 14%

b. Using the subsequent info compute cost of equity
Earnings per share for the next year = Rs.20
Current Market Price of the share = Rs 150

3.A firm sells its products for Rs.150 per unit. The variable cost is Rs.90 per unit and the fixed cost is Rs 60000. Show the different levels of EBIT and the Operating leverage when the firm sells-
a.1000 units
b.2000 units
c.3000 units provide your interpretation

4.What do you mean by combined leverage? discuss with an example

5.Explain Net Operating Income Approach of Capital structure

6.Bring out the significance of stability of dividend

Earning:   Approval pending.