Financial Management suggestions
Hons 3rd Year Exam 2021
বিসমিল্লাহির রাহমানির রাহীম
1. What is business ethics?
Ans: The standards of conduct by which ones action are budget as right of wrong, honest or dishonest, fair or unfair are ethics.
2. Define IRR.
Ans: The discount rate that equates the present value of the future net cash flows from investment project with the projects initial cash outflows is called IRR (Internal Rate of Return), an
3. What is cost driver?
Ans: Any output measures of resources and activities is called cost driver.
4. Define marginal cost.
Ans: The additional cost resulting from producing and selling one additional unit is called marginal cost.
5. What is budget?
Ans. Budget is a plan showing a company’s objectives and how management intends to acquire and use resource to attain those objectives.
Ans. Budget is a quantitative expression about a target plan for acquiring and using resources over a specified time period.
6.What is an EPS?
Ans. Earning per share is the amount earned during the particular period on behalf of each outstanding share of common stock.
7. What is cash dividend?
Ans. If the dividend is paid in the form of cash to the shareholders is called cash dividend.
8. Define stock split.
Ans. A stock split is a corporate action that increases shares by dividing each share, which in turn diminishes its price.
9. What is right shares?
Ans. Right shares are those shares which are issued to existing shareholders.
10. What is gross working capital?
Ans. Total amount invested in the current assets of a company is termed as gross working capital.
11. Elaborate BSEC.
Ans. The Bangladesh Securities and Exchange Commission.
12. What is Economic Order Quantity (EOQ)?
Ans. The order size associated with minimized cost is called Economic Order Quantity.
13. What is risk premium?
Ans. The excess return required from an investment in a likely assets over that required from a risk free investment.
14. What is debt capacity?
Ans. Debt capacity is the manimum proportion of debt that the firm can include in its capital structure and still maintain its lowest composite cost of capital.
15. What is net working capital?
Ans. Net working capital referes to the difference between current assets and current liabilities.
16. What is price carning (P/E) ratio?
Ans. The P/E ratio measures the amount that investors are willing to pay for cash taka of firm’s carvings.
17. What is primary market?
Ans: A primary market is a ‘New issues’ market and a firm raises new capital from this market.
18. What is lease financing?
Ans. contract between a lease, who acquires the services of a leased asset by making a series of rental payments to the lessor, who is the owner of the asset.
19. What is initial public offering (IPO)?
Ans. Initial public offerings (IPO’s) typically have a “POP” in price on the first day of trading.
20. What is spontaneous financing?
Ans. Spontaneous financing consists of the trade credit and other accounts payable which aris ‘Spontaneously in the firms day to day operations. Examples include wages and salaries payable, accrued taxes.
21. What is record date?
Ans. Record data are composed of fields, each of which contains one item of information. A set of records constitutes a file.
22. What is cash conversion cycle (CCC)?
Ans. The flow of cash from purchase of inventory to production from production to sell of goods and collection of receivables and again purchase of raw material can be termed as the cash Conversion Cycle.
23. What is corporate finance?
Ans. Corporate finance deals with promotion, capitalization, financing administration of the corporation.
24. What is agency cost?
Ans. The loss or cost arises from the agency problem is called as agency cost.
25. What is net present value?
Ans. The present value of an investment-Project’s net cash inflow minus the project’s initial cash outflow.
26. What is correlation?
Ans. A statistical measure if relationship between any two series of numbers representing data of any kind.
27. What is money market?
28. What is risk?
Ans. Risk may be defined as the variability of possible out comes from a project.
29. What is prospectus?
Ans. A prospectus is a formal legal document that is required by and filed with the securities and Exchange Commission that provides details about an investment offering for sale to the public.
30. What is operating lease?
Ans. Short term, Cancelable lease agreement are called operating lease.
31. What is optimum capital structure?
Ans: The is capital structure having overall cost of capital is minimum and by which value of the firm is maximized is called optimum capital structure.
32. What is arbitrage process?
Ans: Arbitrage means finding two assets that are essentially the same buying the cheaper and selling the more expensive.
33. What is venture capital?
Ans: Provide early stage financing to new enterprises.
34. What is secondary market?
Ans: A market for existing (used) securities rather than new issues.
35. What is financial lease?
Ans: Long-term. Non-cancellable lease contracts are known as financial lease.
36. What is stock?
Ans: Stock is the capital raised by a company or corporation through the issue and subscription of shares.
37. Define wealth maximization.
Ans: Wealth maximization means maximizing the net present value or wealth of a course of action to shareholders.
38. What is Hurdle rate?
Ans: The minimum required rate of return on an investment is known as hurdle rate.
39. What Scenario analysis?
Ans: Scenario analysis is risk analysis technique in which the best and worst case NPVs are compared with projects expected NPV.
40. What is preferred stock?
Ans: Preferred stock is that kind of stock which provides a specific dividend that is paid before any dividends are paid to common stockholders.
41. What dividend policy?
Ans: The firm’s plan of action to be followed whenever a dividend decision is made is calleddividend policy.
42. What is retention ratio?
Ans: Retention ratio refers to the percentage of net income that is retained to grow the business.
43. What is public issue?
Ans. Public issue is the formal offering or sale of securities to the public by a joint stock company for raising capital. What is pre-emptive right ?
44. What is sale and lease back?
Ans: Under the sale and leaseback arrangement, the firm sells and asset that it own and then leases to same asset back from the buyer.
45. What is stock dividend?
Ans. Stock dividend is paid in the form of the company stock due to raising of more Finance.
46. What is underwriting?
Ans. Bearing the risk of not being able to sell a security at the established price by virtue of purchasing the security for resale to the public; also known as firm commitment underwriting.
47. What is lease?
Ans. Lease is a contract between a lessons; the owner of the assets and a lessee the user of the assets.
48. What is operating cycle?
Ans. The time period between the requisition of inventory and the collection of receivables is called operating cycle.
49. Define corporate governance.
Ans. As the real owners or shareholders are not entitled to take part actively in the management of a company, thus it is governed by elected directors and professional managers. Therefore corporate governance is the task of managing the company and maintaining relationship with the stakeholders by the directors and professional managers.
50. What is indifference points?
Ans. Indifferrence point is that level of EBIT having equal EPS between two different capital structure plans.
51. What is RADR?
Ans. RADR- Risk-Adjusted Discount Rate. The risk-adjusted discount rate is the discount-rate which combines time as well as risk of preference of investors.
52. What is social responsibility?
Ans. Social responsibility refers to those activities which are performed for the welfare of the society.
53. What is business risk?
Ans. A firm’s operational risk is called business risk. Business risk is defined that the firm will not have the ability to complete successfully with the assets that is purchased.
54. What is sensitivity analysis?
Ans. Sensitivity analysis is a risk analysis techniques that indicates how much NPV will change in response to a given change in an input variable, other things held constant.
55. What is levered firm?
Ans. A firm having debt capital is called levered firm.
56. What is hire purchase?
Ans. Hire purchase is a purchase agreement where the ownership of purchased asset will transfer from owner to hirer on paying all installments over a specified period and hirer has no right to sale asset before the payment of last installment.
57. What do you mean by stock repurchase?
Ans. Stock repurchase is a program by which a company buys back its own shares or stocks from the marketplace, reducing the number of outstanding shares.
58. What is best effort offering?
Ans. Best effort offering is an agreement in which the investment bank only takes the responsibility of sale of shares in exchange for commission without being engaged in underwriting and returns the unsold shares to the company.
59. What is bond refunding?
Ans. Bond refunding is a procedure whereby an issuer refinances outstanding bonds by issuing new bonds to reduce the issuer’s interest costs of old bonds.
60. What is working capital management?
Ans. Working capital management is the setting of working capital policy and caring out that policy in day-to-day operations.
61. Define corporation.
Ans. Corporation is an artificial person created by law, having a separate legal entity with a perpetual succession and a common seal.
62. Elaborate CAPM.
Ans. Capital Assets Pricing Model.
63. What is floatation cost?
1. Discuss the principles of business finance.
2. What do you mean by wealth maximization?
3. What is the difference between NOI and NI approach?
4. What are the differences between operating lease and financial lease?
5. Explain in brief the assumptions of Modigliany and Miller (MM) theory.
6. Distinguish between money market and capital market.
7. Discuss the objectives of lease financing as organized in Bangladesh.
8. Discuss the role of a financial manager.
9. Show the difference between risk and uncertainty.
10. Distinguish between bond and common stock.
11. Describe the importance of capital budgeting.
12. Explain the concept of corporate governance.
13. Briefly discuss the importance’s of working capital in a firm.
14. What are the basic criteria for accept-reject decision for different techniques of capital budgeting/Discuss in brief the techniques of capital budgeting.
15. Discuss the goals and objects of financial manager.
16. Why is preferred stock called security?
17. Explain best effort method and firm commitment method of underwriting.
18. What are the techniques adjusting risk in capital budgeting? Explain.
1. a) Define financial management. Discuss social responsibility of financial management. Discuss the importance of financial management. Discuss the three major decisions that financial manager must take. Discuss the factors influencing financial decisions. Describe financial goals in terms of financial management. 99%
2. a) Discuss the advantages and disadvantages of lease. Discuss different method of lease.
(b)Distinguish between lease and purchase.
3. (a) What is agency conflict? Discuss in brief the various techniques of overcoming agency problem/How can it be minimized.95%
4. Define working capital management. Why it is important to study the management of working capital as a separate area in financial management? Briefly discuss various policies of financing working capital. What are the impacts of inadequate working capital.90%
5. Discuss different types of dividend policy.Which factors affecting dividend policy? Write down the benefit of share repurchase.
6. a. What is Zero Coupon Bond? Why do investors buy it although it has no coupon interest?
b. Differentiate between private replacement and public issue.
7. a. Describe the arbitrage process of levered firm?
b. Describe in brief the external factors determining capital structure.
8. Difference between rights issue versus public offering. Discuss IPO proves.
b. Discuss the features of preferred stock.
9. a. What is capital market? Briefly discuss various types of capital market.
b. Briefly discuss the role of security exchange commission (SEC) for capital market in Banglade
10. a. What is bond refunding? Why is it done? Discuss the process of bond refunding.
b. Discus the classification of bond in brief.
Part B: 2015 (3), 2017 (7)
Part C: 2016 (11), 2017 (10)***, 2017 (11), 2018 (11)***
Part B: 2014(4), 2016 (3), 2017 (5)
Part C: 2015 (12)***, 2016(12), 2019 (12)**, 2014(12)
Part B: 2016 (7), 2018 (8)
Part C: 2017-12, 2014-13
Part B: 2014 (8), 2019 (5)
Part C: 2016-14, 2019-14
Part B: 2017 (8)
Part C: 2015(13), 2016 (13)
Part C: 2015-15 (b), 2014-16, 2019-15
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