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| 2012 | | SIKKIM MANIPAL UNIVERSITY
MBA -2-SEM531110555 |
[Financial Management] | MBA-2-SEM, MB0045 ,ASSIGNMNET SET-1 |
Master of Business Administration - MBA Semester 2
MB0045 – Financial Management - 4 Credits
(Book ID: B1134)
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 marks. Answer all the questions. Q.1 What are the 4 finance decisions taken by a finance manager.
Q.2 What are the factors that affect the financial plan of a company?
Q.3 Show the relationship between required rate of return and coupon rate on the value of a bond.
Q.4 Discuss the implication of financial leverage for a firm.
Q.5 The cash flows associated with a project are given below:
Year Cash flow
0 (100,000)
1 25000
2 40000
3 50000
4 40000
5 30000
Calculate the a) payback period. b) Benefit cost ratio for 10% cost of capital
Q6. A company’s earnings and dividends are growing at the rate of 18% pa. The growth rate is expected to continue for 4 years. After 4 years, from year 5 onwards, the growth rate will be 6% forever. If the dividend per share last year was Rs. 2 and the investors required rate of return is 10% pa, what is the intrinsic price per share or the worth of one share. Q1. What are the 4 finance decisions taken by a finance manager.
Ans. A firm performs finance functions simultaneously and continuously in the normal course of the business. They do not necessarily occur in a sequence. Finance functions call for skilful planning, control and execution of a firm’s activities. Let us note at the outset hat shareholders are made better off by a financial decision that increases the value of their shares, Thus while performing the finance function, the financial manager should strive to maximize the market value of shares. Whatever decision does a manger takes need to result in wealth maximization of a shareholder.
1. Investment Decision
MBA -2-SEM531110555 |
[Financial Management] | MBA-2-SEM, MB0045 ,ASSIGNMNET SET-1 |
Master of Business Administration - MBA Semester 2
MB0045 – Financial Management - 4 Credits
(Book ID: B1134)
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 marks. Answer all the questions. Q.1 What are the 4 finance decisions taken by a finance manager.
Q.2 What are the factors that affect the financial plan of a company?
Q.3 Show the relationship between required rate of return and coupon rate on the value of a bond.
Q.4 Discuss the implication of financial leverage for a firm.
Q.5 The cash flows associated with a project are given below:
Year Cash flow
0 (100,000)
1 25000
2 40000
3 50000
4 40000
5 30000
Calculate the a) payback period. b) Benefit cost ratio for 10% cost of capital
Q6. A company’s earnings and dividends are growing at the rate of 18% pa. The growth rate is expected to continue for 4 years. After 4 years, from year 5 onwards, the growth rate will be 6% forever. If the dividend per share last year was Rs. 2 and the investors required rate of return is 10% pa, what is the intrinsic price per share or the worth of one share. Q1. What are the 4 finance decisions taken by a finance manager.
Ans. A firm performs finance functions simultaneously and continuously in the normal course of the business. They do not necessarily occur in a sequence. Finance functions call for skilful planning, control and execution of a firm’s activities. Let us note at the outset hat shareholders are made better off by a financial decision that increases the value of their shares, Thus while performing the finance function, the financial manager should strive to maximize the market value of shares. Whatever decision does a manger takes need to result in wealth maximization of a shareholder.
1. Investment Decision