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End Sem Exam 2021

The document provides instructions and questions for a corporate finance exam. It includes 6 questions covering topics like discounted cash flow techniques, sources of capital financing, stock splits, market share versus price maximization strategies, and risk measurement. Students are asked to answer 5 of the 6 questions in their own handwriting within 3 hours.

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Shivanshu Rajput
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33 views2 pages

End Sem Exam 2021

The document provides instructions and questions for a corporate finance exam. It includes 6 questions covering topics like discounted cash flow techniques, sources of capital financing, stock splits, market share versus price maximization strategies, and risk measurement. Students are asked to answer 5 of the 6 questions in their own handwriting within 3 hours.

Uploaded by

Shivanshu Rajput
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SCHOOL OF ECONOMICS

UNIVERSITY OF HYDERABAD
End Semester Examinations
Corporate Finance Date: 16.12.2021
--------------------------------------------------------------------------------------------------------------
3 Hour Max. Marks 50
Instructions:
 You need to formulate your own examples to explain questions, come up with your
own arguments with logic.

 Write the answers to the questions on white papers in your own handwriting (ruled
or plain). Only black or blue colored pens are to be used to write the answers.

 Evaluation of your answers will be based on the interpretation and application of


economics knowledge, comprehension skills, and critical thinking skills.

 If two or more scripts found identical and will be awarded zero marks to all identical
answer scripts and appropriate disciplinary action will be taken.

 It is student responsibility to submit exam paper electronically before 1.30PM


today.

Answer Any Five. 10*5=50

1. Make a list of the personal finance decisions you expect to encounter over the next five
to ten years. Which of these involve discounting or compounding calculations, either
for the purpose of making decision or for financial planning?

2. What do you understand by discounted cash flow techniques of capital budgeting?


What is Net Present Value and how do you assess the desirability of any project based
on Net Present Value method?

3. Some firms that cut dividends announce stock splits or declare stock dividends
simultaneously. Why might this make this a difference in the stock price reaction to the
dividend cut?

4. Discuss the sources from which a large and small industrial enterprise can raise capital
for financing modernization and expansion.

5. Some corporate strategists have suggested that firms focus on maximizing market share
rather than market prices. When might this strategy work, and when might it fail?

6. a) How is the risk of an individual asset measured, when all investors hold the market
portfolio?
b) We usually estimate the variance of an asset by looking at historical (past) returns.
Under what conditions may this approach not be appropriate for estimating a variance
for use in a risk and return model?

7. Assume that you are advising an Indian firm on corporate financial questions and that
you do not believe that the Indian stock market is efficient. Would you recommend
stock price maximization as objective? If not, what would you recommend?

ALLTHE BEST
*****

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