3 marks questions

1. Mention any three factors influencing capital structure.

2. What are the three functions of FM?
3. What is red prospective and green shoe option?
4. Depict the organisation of finance function.
5. What is the time value of money? Explain.
6. What is capital budgeting?
7. What are the various investment decisions classify? Explain.
8. What is meant by net working capital? Explain operating cycle.
9. What is corporate governance?
10. What is ESOP?
11. What are the three main financial decisions in a firm?
12. Explain stable payout ratio in dividend policy.
13. Distinguish between debentures and equity.
14. What do you mean by leverage? List the types of leverage.
15. What is agency problem?
16. Mention any three differences between stock market and commodity market.
17. What is meant by risk management?
18. What are flotation costs?
19. What do you mean by cost of capital?
20. What do you mean by capital structure?
21. What do you mean by forex market?
22. Distinguish between diversifiable and non diversifiable risk.
23. What is agency cost?
24. What are market value weights and book value weights?
25. What is accounting rate of return?
26. What is market risk?
27. What is risk and return?
28. Distinguish stock market from commodities market.
29. What do you understand by gross working capital and net working capital?
30. What is financial risk?
31. What is meant by depreciation tax shield?
32. What are the elements of cash flow stream of a project?
33. Write a note on stability of dividend.
34. What is trading on equity?
35. What are global depository receipts?
36. Distinguish between future value and present value.
37. What is a cash cycle?
38. What is optimum capital structure?
39. What is commodities market?
40. What is business and financial risk?
41. What is listing?
42. What is underwriting?
43. What do you understand by the term constant payout ratio?
44. Define operating leverage.
45. What is product cannibalisation? How it is treated while estimating project cash flows?
46. What is preferential allotment of shares?
47. Who is a debenture trustee and what is his role?
48. What is an option contract and how is a call option different from put option?
49. What is GDR?
50. What do you mean by CAPM? Mention any two advantages of CAPM.
51. Enumerate various sources of finance to support current assets.
52. How options are fundamentally different from forward and futures contracts?
53. Distinguish between gross working capital and net working capital.
54. What are sweat equity shares?
55. What is difference between GDR and ADR?
56. What is capital rationing?
57. What is the difference between capital structure and financial structure?
58. What do you mean by discounting rate?
59. What is meant by pre emptive rights enjoyed by equity shareholders?
60. What is discounted payback period and why is it better than payback period method?
61. What are sunk costs and how are they treated while estimating cash flows of a project?
62. What is pecking order of financing followed by firms and what is the rationale behind such
order?
63. What is bonus issue of shares and why do companies make bonus issue?
64. What is preferential allotment of shares?
65. Mention different types of working capital
66. Mention any six functions of development banks.
67. What do you mean by dividend payout ratio?
68. Write a note on cash cycle.
69. What is meant by paying the float?
5 marks questions
1. What is working capital management? Explain operating cycle.
2. Retained earnings are a cost free source of fund. Comment.
3. Bring out the differences between mergers and acquisitions.
4. What do you mean by trading on equity? Distinguish between trading on equity and
financial leverage.
5. What is IPO? What are advantages and disadvantages of going public?
6. What are forward contracts? Differentiate between forward and futures contracts.
7. What do you mean by capital budgeting? State the different kind of capital budgeting
proposals.
8. Explain the merits and demerits of CAPM approach of cost of equity.
9. What is angel investing and private equity?
10. Write a note on CAPM.
11. Write a note on behavioural finance.
12. What is leasing? Explain different types of lease

7 marks questions
1. Explain the factors affecting dividend policy of an organisation.
2. Write a brief note on Indian financial system, its institutions and markets.
3. Explain in brief the types of hybrid financing.
4. Distinguish between profit maximisation and wealth maximisation.
5. Risk-return trade off and the types of risks.
6. Define long term sources of finance categories and finance features.
7. Explain capital asset pricing model (CAPM) with its assumptions.
8. Explain Indian financial system in detail.
9. What is a dividend decision? What is constant dividend per share, constant payout,
and constant dividend per share plus extra dividend policies?
10. Distinguish between money market and capital market.
11. Explain the legal provisions of corporate governance under companies act.
12. Explain warrants and convertibles.
13. Explain the different sources of long term funds.
14. Differentiate between primary market and secondary market.
15. Explain the different types of investment evaluation techniques.
16. Describe the SEBI guidelines on ESOP.
17. Explain the organisation of finance function.
18. Discuss the elements of good corporate governance.
19. Explain the different approaches to financing working capital requirements.
20. Explain the various current assets financing policies.
21. What is NPV? How is it superior over other techniques?
22. What are the key elements of SEBI code on corporate governance?
23. What do understand by cost of capital? Discuss its significance.
24. What is financial planning? Explain the steps involved in financial planning.
25. What are term loans? Describe briefly the features of term loans.
26. What are the functions of secondary market? Explain.
27. Mention the merits and demerits of payback period method.
28. Briefly explain the functions of a treasurer and controller in an organisation.
29. What is bonus issue of shares? Briefly explain the reasons for both bonus issue and its
impact on shareholders.
30. Briefly explain the advantages and disadvantages of issuing fresh equity shares for raising
funds.
31. Write a note on stable dividend policy.
32. Explain in brief four basic principles of cash flow estimation.
33. Explain the different types of derivatives
34. What is leasing? Distinguish between hire purchase and leasing
35. Distinguish between forwards and futures.
36. State the benefits of adequate working capital and dangers of inadequate working capital.
37. What factors should a firm consider while issuing preference shares?
38. Explain three important sources of short term financing
39. Explain in detail the net income approach to capital structure of a firm
40. Briefly explain the methods of computing the cost of debt capital
41. Write a note on scope of financial management for a corporate organisation.

10 marks questions
1. Define derivatives. Explain the different types of derivatives.
2. Explain the various functions of financial manager and the changing role of financial
manager in present scenario.
3. Write a note on institutional finance available in india.
4. Explain the features, advantages and limitations of term loans as a long term source of
financing. When do firms prefer term loans to debentures and why?
5. What is the significance of a string financial system in a growing economy? Explain in detail
functions of a financial system.
6. What is leasing? What are the reasons for leasing and how is it different from hire purchase?
7. Briefly explain various evaluation techniques used in capital budgeting. Also, enumerate one
merit and demerit of each.
8. Explain the factors influencing options valuation.
9. Explain the factors determining capital structure decision.
10. Explain the factors determining working capital requirement.
11. Wealth maximisation objective is superior to profit maximisation objective for an
organisation. Explain.
12. Explain the objectives of FM.