Financial Management question, Accounting Department, Hons 3rd Year Exam-2021

Financial Management question Accounting Department

Hons 3rd Year Exam-2021

National University


[According to the New Syllabus]

Subject Code: 232513

[Financial Management(In English)]

Time—- 4 hours

Full marks—- 80

[N.B. Answer the questions from each group sequentially]


Group A

(Answer any ten questions)

Marks—- 1×10-10


1. (a) What is meant by wealth maximization?




(b) What is agency cost?




(c) Write down the full form of CAPM.


Ans: Capital Assets Pricing Model.


(d) Define Internal Rate of Return (IRR).




(e) What is operating cycle?




(f) What is lease financing?




(g) Define dividend Pay-out ratio (D/P ratio).




(h) Mention the types of firms as directed by Walter Model.




(i) Elaborate BSEC.



(j) What is lease financing?




(k) What is meant by net working capital?




(1) Define operating cycle.



Group B

(Answer any five questions)



2. What is agency problem and discuss briefly potential solution of the probl


3. Define: (a) NPV, (b) ARR

4. Math

5. ABC Lad an all equity firm expects perpetual EBIT of Tk 20,00,000 per year. The firm’s all equity discount rate is 20%. The firm is subject to a 40% corporate tax rate.


(a) What is the value of ABC Ltd.

(b) If ABC Ltd. issues Tk. 5,00,000 of debt and uses the proceeds to repurchase stock, what will the value of firm be?


6. The stock of Nadia Ltd. is selling for Tk 50 per share. The company then issues right to subscribe to one new share at Tk. 40 for each five right held.

Compute the theoretical value of—

(a) A right when the stock is selling right on.

(b) A right when the stock sells ex rights at Tk. 50.


7. Following information are available for a company:

D1 = Tk. 12

Ke = 20%

Po =  Tk 200

Required rate of return = 15%

You are required to calculate—

(a) Retention ratio

(b) Earning per dare


8. Write down the advantages of lease financing


9. Distinguish between right issue and public offering

Group C

(Answer any five questions)



10. (a) Discuss the major Principles of financial management.

(B) How agency problems are dealt with?


11. Math