Financial Services
Question : Case Study: ABC Corporation - Financing Growth Strategies
ABC Corporation, a leading manufacturing company, is looking to finance its growth strategies. The company is exploring various sources of business finance to achieve its expansion goals.
Questions : Debentures and Financial Instruments
What does the term "redeemable" mean in relation to debentures?
Option 1: The debentures can be traded in the stock market
Option 2: The debentures can be converted into equity shares
Option 3: The company is obligated to repay the principal amount
Option 4: The company can defer interest payments on debentures
Questions : Equity Shares and Preference Shares
What is the main advantage of preference shares for companies like ABC Corporation?
Option 1: No dilution of ownership
Option 2: Higher dividend payouts
Option 3: Strong voting rights
Option 4: Fixed interest payments
Correct Answer: No dilution of ownership
Solution : The correct answer is (a) No dilution of ownership
Preference shares allow companies to raise funds without diluting ownership stakes or control. Unlike issuing additional common equity shares, issuing preference shares does not dilute the ownership of existing shareholders because preference shareholders
Question : Case Study: PQR Enterprises - Funding Strategies for Diversification
PQR Enterprises is a well-established conglomerate planning to diversify its business operations. The company is evaluating various sources of business finance to support its diversification plans.
If PQR Enterprises issues redeemable preference shares, what does this mean?
Option 1: Shareholders can convert shares into debentures
Option 2: Preference shareholders can vote on company decisions
Option 3: The company has the option to buy back the shares
Option 4: Dividends on these shares are fixed and guaranteed
Correct Answer: The company has the option to buy back the shares
Solution : The correct answer is (c) The company has the option to buy back the shares
Redeemable preference shares are those that the issuing company has the option to buy back or redeem after a certain period,
Questions : Business Finance and Diversification
Why does PQR Enterprises need external financing for its diversification plans?
Option 1: To eliminate competition
Option 2: To decrease market share
Option 3: To reduce operational costs
Option 4: To fund new business ventures
Correct Answer: To fund new business ventures
Solution : The correct answer is (d) To fund new business ventures
Diversification often involves venturing into new business areas, launching new products or services, or entering different markets. These expansions require capital for research and development, marketing, hiring additional staff, acquiring assets,
Question : Case Study: XYZ Ltd. - Raising Finance for Expansion
XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.
Questions : Meaning and Need for Business Finance
Why does XYZ Ltd. need business finance for its expansion?
Option 1: To increase employee satisfaction
Option 2: To reduce production costs
Option 3: To explore new markets
Option 4: To fund its expansion plans and meet capital requirements
Correct Answer: To fund its expansion plans and meet capital requirements
Solution : The correct answer is (d) To fund its expansion plans and meet capital requirements
Expanding operations in a business often requires substantial capital investment for various purposes, such as acquiring new assets, increasing production capacity, entering new
Question : Case Study 5:
LMN Corporation is a multinational conglomerate looking to manage its currency exposure effectively.
Question :
If LMN Corporation decides to issue short-term debt to finance its international operations, which money market instrument might it use?
Option 1: Corporate bond
Option 2: Call money
Option 3: Treasury bill
Option 4: Commercial paper
Correct Answer: Commercial paper
Solution : The correct answer is (d) Commercial paper
If LMN Corporation decides to issue short-term debt to finance its international operations, it might use commercial paper as a money market instrument. Commercial paper is a short-term unsecured promissory note issued by corporations and financial institutions
In Gujarat, several colleges offer MBA in Finance, suitable for Mechanical Engineering graduates looking to shift to management. Top choices include:
1. Indian Institute of Management, Ahmedabad (IIM-A) – Known for its world-class MBA program.
2. MICA, Ahmedabad – Offers an MBA with finance-related electives.
3. Nirma University, Ahmedabad –
What does the term "callable" mean in relation to debentures?
Option 1: The company can choose to extend the maturity date
Option 2: The company has the option to buy back the debentures
Option 3: The debentures can be converted into equity shares
Option 4: The debentures are secured by company assets
Correct Answer: The company has the option to buy back the debentures
Solution : The correct answer is (b) The company has the option to buy back the debentures
When debentures are labeled as "callable," it means that the issuing company has the right, but not the obligation, to buy
Question : Which one of the following appointments is not within the purview of the President of India?
Option 1: Chief Justice of India
Option 2: Chairman of Finance Commission
Option 3: Chief of Army Staff
Option 4: Speaker of Lok Sabha
Correct Answer: Speaker of Lok Sabha
Solution : The correct answer is the Speaker of Lok Sabha.
General elections are used to choose the Lok Sabha members. The speaker of the Lok Sabha and the deputy speaker are chosen by the majority of members of Parliament present and voting in
Question : Case Study 34
ABC Ltd. is a conglomerate planning to expand its operations. The company's management is considering the roles of SEBI in the financial market.
What is the full form of SEBI?
Option 1: Securities and Exchange Board of India
Option 2: Stock Exchange and Banking Institution
Option 3: Securities and Equity Brokerage Institute
Option 4: Stock Exchange and Business Investment
Correct Answer: Securities and Exchange Board of India
Solution : The correct answer is (a) Securities and Exchange Board of India
The full form of SEBI is Securities and Exchange Board of India. SEBI is the regulatory body in India that oversees and regulates the securities market, protecting the interests
The Question containing Inaapropriate or Abusive Words
Question lacks the basic details making it difficult to answer
Topic Tagged to the Question are not relevant to Question
Question drives traffic to external sites for promotional or commercial purposes
The Question is not relevant to User
And never miss an important update
