Correct Answer: Achieving long-term sustainability goals
  

Solution : The correct answer is (b) Achieving long-term sustainability goals

Financial planning with a focus on sustainability aims to ensure that UVW Industries can allocate financial resources strategically to achieve their long-term sustainability objectives. This involves budgeting, forecasting, and managing funds in a way that supports sustainable practices, eco-friendly projects, and initiatives that contribute to the company's environmental and social responsibility goals. While financial planning does involve managing operational expenses and meeting financial obligations, the overarching objective in this context is to promote sustainability and responsible business practices for the long-term benefit of the company and the environment.

Correct Answer: Instruments for raising funds in foreign markets

Solution : The correct answer is (d) Instruments for raising funds in foreign markets

GDRs and ADRs are financial instruments that represent shares of a foreign company and are traded on international stock exchanges. They allow companies like XYZ Ltd. to raise funds from investors in foreign markets without directly listing their shares on those markets. GDRs are typically issued outside the United States, while ADRs are issued in the United States. Both GDRs and ADRs facilitate access to a broader base of international investors and provide a way to raise capital by issuing shares to investors in different parts of the world.

Correct Answer: Dividends on these shares must be paid before any arrears
  

Solution : The correct answer is (b) Dividends on these shares must be paid before any arrears

Cumulative preference shares entitle the shareholders to receive their fixed dividends before any dividends are paid to equity shareholders. If the company is unable to pay dividends in a particular year, the unpaid dividends accumulate and must be paid in future years before any dividends are distributed to equity shareholders. This ensures that the preference shareholders receive their dividends, including any unpaid amounts from previous years, before equity shareholders receive any dividends.

Correct Answer: By utilizing profits accumulated over the years

Solution : The correct answer is (c) By utilizing profits accumulated over the years

Retained earnings are the accumulated profits that a company has retained and not distributed to shareholders as dividends. ABC Corporation can use these retained earnings to finance its expansion initiatives, such as investing in new projects, acquiring assets, expanding operations, or entering new markets. This form of financing doesn't involve issuing new shares, borrowing from financial institutions, or liquidating assets; instead, it relies on utilizing the company's internally generated profits.

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, covering operational expenses, and other investment needs. External financing, such as loans or equity investment, provides the necessary funds to support these diversification initiatives and facilitate the successful expansion of the business into new ventures. Options a, b, and c are not relevant to the need for external financing in the context of diversification.

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. Financial planning is crucial for optimizing the allocation of funds across various activities within a business. It involves analyzing financial resources and determining the best allocation to achieve the organization's goals and objectives efficiently.

Statement 2 is false. Financial planning does not focus only on the allocation of funds to marketing activities. Financial planning is a comprehensive process that considers allocation of funds across all areas of a business, including operations, marketing, research and development, expansion, debt repayment, investments, and more. It aims to optimize the allocation of funds across all relevant aspects of the business.

Correct Answer: Securities and Exchange Board of India (SEBI)

Solution : The correct option is the Securities and Exchange Board of India (SEBI).

The Securities and Exchange Board of India (SEBI) is the financial organization in India that safeguards investor interests and promotes the smooth operation of stock market intermediaries. The Indian securities industry is governed by SEBI.

Correct Answer: Achieving long-term financial goals and stability

Solution : The correct answer is (c) Achieving long-term financial goals and stability

Financial planning in a business involves creating a comprehensive strategy to manage financial resources efficiently, allocate funds effectively, and achieve both short-term and long-term financial objectives. It's about ensuring the company's stability and growth over time, managing risks, optimizing resource utilization, and making informed decisions to achieve sustainable success in the long run. The goal is to achieve financial stability and meet the company's long-term goals and objectives, rather than focusing solely on short-term operational needs or maximizing profits at any cost.

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 (Global Depositary Receipts) and ADRs (American Depositary Receipts) serve similar functions in that they both allow companies to raise funds in international markets. GDRs are negotiable financial instruments issued by a depositary bank, typically in a country other than where the issuing company is based. They represent a claim to shares in a foreign company and are traded on international stock exchanges. GDRs enable companies to raise capital from investors in international markets.

ADRs are a specific type of GDR that represents shares of non-U.S. companies traded on U.S. stock exchanges. They make it easier for non-U.S. companies to attract investment from American investors by facilitating trading of their shares in the U.S. financial markets.

Both GDRs and ADRs play a crucial role in allowing companies to access international capital markets and attract investment from a broader investor base outside their home countries.

Correct Answer: International Depository Receipt
 

Solution : The correct answer is (b) International Depository Receipt

An International Depository Receipt (IDR) is a financial instrument denominated in a foreign currency and is offered by a non-resident company outside the country where it is listed. IDRs represent shares of the foreign company and can be traded on international stock exchanges, allowing companies to raise capital from investors in foreign markets.