Correct Answer: Planning Commission 

Solution : The correct option is Planning Commission.

The Planning Commission was officially established by the President of India to advise on the allocation of national resources between the central government and the states. The Planning Commission was instrumental in developing Five-Year Plans and awarding monies for different development projects and programmes. But in 2015, Planning commission was superseded by NITI Aayog.

Correct Answer: A fixed dividend before equity shareholders

Solution : The correct answer is (c) A fixed dividend before equity shareholders

Preference shareholders are entitled to receive a fixed dividend at a predetermined rate before any dividend is paid to equity shareholders. This characteristic distinguishes them from equity shareholders, who may receive variable dividends based on the company's profitability and decisions made by the board of directors. However, preference shareholders typically do not have voting rights in the company's decisions, and their shares usually cannot be converted into debentures.

Correct Answer: To allocate funds for new ventures effectively

Solution : The correct answer is (d) To allocate funds for new ventures effectively

Financial planning is essential for diversification as it involves assessing the financial requirements of entering new business areas, determining the amount of funding needed, and devising a strategic plan to allocate funds efficiently. Effective financial planning helps in managing the resources, optimizing budgets, securing necessary financing, and ensuring that the new ventures are adequately funded for successful implementation. This ensures that the company's diversification efforts are financially sustainable and aligned with the broader strategic goals of the organization. Options a, b, and c are not directly related to the significance of financial planning for diversification.

Correct Answer: Financial planning

Solution : The correct answer is (c) Financial planning

Financial planning entails determining the company's financial goals and objectives and devising strategies to achieve them. Selecting the right sources of funds is a crucial aspect of financial planning, as it involves evaluating and choosing the most suitable options for obtaining the necessary funds to support the business's operations, growth, and expansion. This decision is essential for ensuring the financial health and sustainability of the company.

Correct Answer: By allowing conversion into equity shares

Solution : The correct answer is (c) By allowing conversion into equity shares

Convertible preference shares grant the shareholder the right to convert these shares into equity shares at a predetermined conversion ratio and within a specified time frame. This allows the preference shareholders to become equity shareholders and participate in the ownership and growth of the company. It provides flexibility to the shareholders while potentially leading to an increase in equity capital for the company if the conversion option is exercised. This is a common way for companies to raise funds while attracting investors. Options a, b, and d are not accurate methods for raising funds through convertible preference shares.

Correct Answer: To fund expansion projects and investments

Solution : The correct answer is (d) To fund expansion projects and investments

External financing is typically sought to fund expansion initiatives, invest in new projects, acquire assets, enter new markets, develop new products, hire additional staff, or cover increased operational expenses. It provides the necessary capital to support growth strategies and ensure the company's ability to capitalize on opportunities and achieve its long-term objectives. Lowering operational costs, decreasing market share, or enhancing employee satisfaction are not the primary reasons for seeking external financing for growth plans.

Correct Answer: Both enable companies to raise funds in international markets

Solution : The correct answer is (d) Both enable companies to raise funds in international markets

GDRs and ADRs are both financial instruments that enable companies to raise funds in international markets by issuing depositary receipts. GDRs are issued and traded outside the United States, while ADRs are specifically issued and traded in the United States. They allow companies to tap into a larger pool of investors and access capital from international markets without directly listing their shares on foreign stock exchanges. These instruments represent claims to shares in the issuing company and facilitate investment from investors in different regions around the world.

Correct Answer: Acquiring funds for business operations and expansion
 

Solution : The correct answer is (b) Acquiring funds for business operations and expansion

Business finance involves acquiring the necessary funds and managing financial resources to support a company's day-to-day operations, projects, and future growth. It encompasses activities related to budgeting, financial forecasting, investment decisions, obtaining loans or equity, managing working capital, and overall financial planning to ensure the efficient use of financial resources for achieving the company's objectives.

Correct Answer: Statement 1 is true, and statement 2 is false.
   

Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.

Statement 1 is true. The need for business finance often arises due to uncertainties and risks in business operations. Businesses need financial resources to mitigate risks, navigate uncertainties, and ensure smooth operations.

Statement 2 is false. Financial planning aims to manage and mitigate risks, but it does not eliminate all uncertainties in business activities. Uncertainties are inherent in business, and while financial planning can help in managing and preparing for them, it cannot completely eliminate them.