1. (a) Wealth maximization.
(b) Financial asset.
(c) IRR.
(d) BEP.
(e) Net income approach.
(f) Stock dividend.
2. What are the determinants of working capital in a manufacturing company?
3. Explain the techniques of cash management.
4. Describe different methods of valuing a firm.
5. Enumerate the role of financial manager in a concern.
6. Discuss the working of Indian money market.
7. State different methods of measuring leverage of a firm.
8. Case study
Ever-Responsive Ltd is a widely-held company. It is considering a major expansion of its production
facilities and the following alternatives are available :
Particulars Alternatives
(Rs.) (Rs.) (Rs.)
Share capital 50,00,000 20,00,000 10,00,000
14% debentures – 20,00,000 15,00,000
Long-term loan @ 18% p.a. – 10,00,000 25,00,000
Expected rate of return before tax is 25%. The rate of dividend of the company has
been not less than 20%. Taxation rate applicable the company is 50%.
Assuming that at present, there is no debt, which alternative financing strategy do you recommend? And

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