Capital Investment and Financing Decisions PART 1 Very important Guess(1) What is corporate restructuring? What motivates an enterprise to engage in restructuring exercise?(2) Discuss various forms of mergers. What are the driving forces for mergers & acquisitions?(3) Discuss various steps involved in a merger.(4) What are the regulatory provisions in India regarding mergers and acquisitions?(5) How would you assess merger as a source of value addition?(6) What is the cost of a merger from the point of the acquiring company?(7) How would you determine the present value of a merger from the point of view of the acquiring company?(8) What is financial engineering? Do you feel financial engineers play an economic role in the society?(9) Briefly discuss the financial engineering process that you will follow while developing new products or solutions.(10) List down with examples any five variables that contribute new products development.(11) Explain how fixed income securities are used to manage product price risk?(12) Discuss innovation that took place in equity products and explain what they achieved?(13) What is non-voting share? How is it useful to the company and investors?(14) What is the use of derivatives? Is it an instrument designed for speculators or useful to others too?(15) Explain any two derivative products and show the value addition in them.(16) What are the factors which influence management’s dividend of a certain amount?(17) Discuss the implications of making dividends tax free.(18) “If it is all very well saying that I can sell shares that may mean selling at the bottom of the market. regular dividend, investors can avoid that risk” discuss?(19) “Risky companies tend to have lower target pay out gradual adjustment rates” do you agree? Give reasons?(20) What are the different pay out methods? How do these methods?(21) Distinguish between bonus shares and share split.earnings per share, dividends, and market price?(22)Do you agree with Walter’s dividend model ? Discuss its relevance and limitations.(23)Examine the M.M’s irrelevance hypothesis. Critically evaluate itsassumptions.(24) What is the informational content of dividends? Discuss its its influence on share value. (25) How is lease finance different from that of equity or debt finance?(26) In evaluating funding options, when do you chose lease finance?(27) Is lease finance cheaper than other sources of finance? If so, under what conditions will it be cheaper than other sources of finance?(28) Explain how Securitization is considered as a source of finance? Who are the typical investors for such papers?:(29) Suppose you are working for a venture capital company. What are the things you will look into a proposal that comes to you for venture capital funding?(30) Is it possible to get funds from venture capitalist for all kinds of projects? Explain.(31) How is factoring different from that of traditional bill discounting scheme?(32) Bring out the significance of term lending organisations in the financing of industries.(33) What are the recent trends in the financing of industrial units? Are they going in healthy direction?(34) Briefly highlight the procedures and norms followed by the FIs in extending credit. Can you suggest any modifications to the existing procedure?(35) What is post sanction monitoring? How is monitoring exercised by FIs in India?(36) Bring out the role of nominee-directors in the industrial units. Should we continue this practice?(37)“Convertibility clause is a drag on the Financing facility provided by Indian Financial Institutions”. Comment.?(38) Highlight the important recommendations of Narasimham Committee relating to DFI sector. Are you satisfied with the way government is implementing them?(39) In the present day scenario, should there be restrictions on the form and type of assistance sanctioned by FIs in the country?(40) Briefly discuss the soft loan scheme of IDBI.(41) What do you mean by globalisation? Comment on the level of globalisation of Indian capital market?(42) What are euro issues? Discuss some important instruments of euro currency.(43) Discuss some of the major types of institutions that constitute the international financial system?(44) What are the major global sources of financing? How far have Indian Corporates tapped these global sources?(45) What are the characteristics of capital market? How is it different from money market?(46) Explain the relationship between primary market and secondary market?(47) Assess utility of equity shares as source of corporate financing.(48) “Preference shares are known as ‘hybrid’ securities”. Comment.(49) What is creditorship security? How is it different from ownership security?
Capital Investment and Financing Decisions PART II Very important Papers(50) Examine potentiality bonds as source of corporate financing.(51) Discuss the capital budgeting techniques without probabilities.(52) Describe the general formulation of a goal programming model.(53) What is meant by utility? Do you feel financial managers should be risk averse? Why or why not?(54) Why should we be concerned with risk in capital budgeting? Is the standard deviation an adequate measure of risk? Can you think of a better measure?(55) If project A has an expected value of net present value of Rs. 20,0000 and a standard deviation of Rs. 40000, is it more risky than project B, whose expected value is Rs. 140000 and standard deviation is Rs. 30000? Explain.?(56) (a) In a probability tree approach to project risk analysis, what are initial, conditional, and joint probabilities?(b) What are the benefits of using simulation to evaluate capital investment projects?(57) What is the purpose of control? To what is it directed?(58) What are the three main types of control systems? What questions should a control system answer?(59) What tools are available to the project manager to use in controlling a project? Identify some characteristics of a good control system?(60) What is the mathematical expression for the critical ratio? What does it tell a manager?(61) How might the project manager integrate the various control tools into a project control system?(62) How could a feedback control system be implemented in project management to anticipate client problems?(63) Define monitoring. Are there any additional activities that should be part of the monitoring function?(64) What are the most critical problems that arise in calculating a rate of return for a prospective investment?(65) What other factors in addition to rate of return analysis should be considered in determining capital expenditures? (66) What percentage of the total project effort do you think should be devoted to planning? Why?(67) Why do you suppose that the coordination of the various elements of the project is considered the most difficult aspect of project implementation?(68) What kinds of problem areas might be included in the project plan?(69) What is the role of systems integration in project management? What are the three major objectives of systems integration?(70) In what ways may the WBS be used as a key document to monitor and control a project?(71) What are the six component planning sequences of project planning?(72) Any successful project plan must contain nine key elements. List these items and briefly describe the composition of each?(73) What are the basic guidelines for systems design that assure that individual components of the system are designed in an optimal manner?(74) What are the general steps for managing each “work package” within a specific project?(75) Critically examine various theories of capital structure?(76) Narrate the factors influencing capital structure?(77) Explain the criteria for determining pattern of capital structure?(78)Discuss the relevance of debt-equity ratio for Indian Public Enterprises?(79) What is a firm’s capital structure? How is it different from financial structure?(80) Under the traditional approach to capital structure, what happens to the cost of debt and cost of equity as the firm’s financial leverage increases?(81) Explain ROI-ROE analysis?(82)Explain the EBIT-EPS approach to the capital structure. Are maximizing value and maximizing EPS the same?(83)Why is the cost of capital considered as the minimum acceptable rate of return on an investment?(84) How is the Cost of Debt Capital ascertained? Give examples.(85) How would you find the cost of capital for proprietorship or partnership firm? Can you thing of any ways to do this? List them.?(86) “Retained earnings are cost free” comment?(87) Discuss various uses of the concept of Cost of Capital?(88) Determine the cost of capital for the following securities?(89) Why is Time Value of Money independent of inflation and risk? Differentiate Present Value and Terminal Value?(90) What is Net Present Value? How is the NPV rule related to the wealth maximization objectives of a firm?(91) What is IRR ? How does it relate to financing decisions? Can you use it for investment decisions of the accept/reject type?(92) What is Investment Decisions? How is it different from financing decisions?(93) Bring out the factors influencing long-term financial decisions of the firm ?(94) ‘Obtaining Positive NPV implies the same thing as minimizing the cost of capital’ Explain with examples?
