M.COM. (Semester III) (CBCS) Examination, 2017
BUSINESS FINANCE
Day Date: Tuesday, 25-04-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the alternatives given below. 14
In theory a company is caitalised on the basis of
expected earnings.
Earning Cost
Expenditure Income
The basic objective of business finanace is
Efficeint manangemnet Arrangement of funds
Procurement and use of
funds
None of these
Liberal dividend policy may lead
Over capitalization Under capitalization
Faire capitalization Watered stock
Finance can be raised by through corporate securities.
Co operative societies Partnership firms
Companies Sole proprietary concern
The utilization of retained earnings for meeting the financial needs
of a business is known as
External financing Global financing
Corporate financing Self financing.
Offshore funds are floated
In India Outside India
In USA None G
The shares of over capitalized company are sold at
Premium Par
Discount Profit
Joint venture is the important form of
Direct investment Indirect investment
Portfolio investment None of these
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SLR-Q- 63
Shortage of capital may lead to
Under-capitalisation Over-capitalisation
Fair-capiatlisation None of these
10) are called residual claimants in a company.
Preference shareholder Bond holder
Equity holder Debenture holder
11) A company can accept public deposits for a maximum period
of
12 months 24 months
36 months 48 months
12) funds combins features of open ended and closed
ended funds.
Growth Income
Interval Balanced
13) Proposal attracting compulsory license require approval from

Government RBI
Ministry of Finance None of these
14) debentures are not payable during the life time of
the company issuing them.
Irredeemable Redeemable
Registered Bearer
Q.2 Write short notes. 14
Characteristic of sound financial plan
Objective of Business finance.
Q.3 Write short answers. 14
What is foreign collaboration? Discuss the forms of foreign
collaboration.
Explain the cost theory of capitalization.
Q.4 Answer any one of the following questions. 14
What do you mean by self financing? Explain the advantages
and disadvantages of self financing.
What do you mean by Mutual Funds? Explain the different
types of mutual funds.
Q.5 Answer any one of the following questions. 14
Explain the role and importance of foreign capital in Indian
economy.
State the meaning of under-capitalisation. What are the
effects and remedies for under-capitalisation?