2013 (November – December)
Time: 3 Hours
1. (A) Give an overview on evolution of financial management. 16
(b) Elucidate the assumptions underlying the financial objectives. 16
2. (a) from the following balance sheet of A ltd. Prepare a comparative balance sheet with comments.
Equity share capital
Profit and loss
Provision fro tax
(b) Why is it necessary to calculate the profitability ratio in relation to sales? Illustrate your answer. 16
3. (a) The AB industries Limited has 900000 shares outstanding at current market price of Rs.130 per shares. The company needs Rs.225 crores to finance proposed modernisation cum expansion project. The board of company has decided to issue rights for raising the required money. The subscription (issues) price has been fixed at Rs. 75 per shares. The subscription price has set below the market price to ensure that the right issue is fully subscribed. How many rights required to purchase a new share? What is the value of a right ? 16
(b) how does a term loan differ from a non- convertible debenture?
4. (a) In addition to trade credit, accrued expenses and deffered income are other spontaneous source of short term financing. Justify your answer. 16
(b) Illustrate captive finance companies in relation to short term financing. 16
5. (a) elucidate the players in derivates trading and the functions of future markets. 8+8
(b) How for over the counter exchange of india is able to fulfill the needs of the small companies. 16