Financial Services
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.
Questions : Debentures and Financial Instruments
PQR Enterprises is considering issuing IDR. What purpose does an IDR serve?
Option 1: It raises funds in the domestic market
Option 2: It allows foreign companies to invest in India
Option 3: It enables Indian companies to raise funds abroad
Option 4: It ensures dividend payments to preference shareholders
Correct Answer: It enables Indian companies to raise funds abroad
Solution : The correct answer is (c) It enables Indian companies to raise funds abroad
IDR stands for Indian Depository Receipts. An IDR is a financial instrument denominated in Indian Rupees and issued by a domestic depository in India. It
Question : Case Study 22:
DEF Ltd. is a well-established company planning to expand its global operations through acquisitions.
Question :
To finance its acquisition plans, DEF Ltd. is evaluating short-term financing options. Which money market instrument might it use?
Option 1: Commercial paper
Option 2: Call money
Option 3: Treasury bill
Option 4: Corporate bond
Correct Answer: Commercial paper
Solution : The correct answer is (a) Commercial paper
Commercial paper is a short-term unsecured promissory note issued by corporations to raise funds quickly. It is a common choice for businesses looking for short-term financing to support various operational needs, including acquisitions. It provides a quick
Questions : Business Finance and Diversification
What is the significance of financial planning for PQR Enterprises in the context of diversification?
Option 1: To maximize short-term profits
Option 2: To ensure regulatory compliance
Option 3: To select the best employees
Option 4: To allocate funds for new ventures effectively
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
Question : Which among the following banks launched the "Gram Seva Program" across six states in India in October 2022?
Option 1: Industrial Credit and Investment Corporation of India
Option 2: Reserve Bank of India
Option 3: State Bank of India
Option 4: Housing Development Finance Corporation
Correct Answer: State Bank of India
Solution : The correct option is the State Bank of India.
The State Bank of India (SBI) launched the "Gram Seva Program" on Gandhi Jayanti 2022, targeting comprehensive village development in education, healthcare, livelihoods, and infrastructure.
Question : Case Study: UVW Industries - Sustainable Financing for Green Initiatives
UVW Industries is a company committed to sustainable practices and is undertaking environmentally friendly initiatives. The company is exploring various sources of business finance to support its green projects.
Questions : Business Finance and Sustainability
Why does UVW Industries need external financing for its sustainable initiatives?
Option 1: To minimize employee turnover
Option 2: To fund marketing campaigns
Option 3: To support green projects that require funding
Option 4: To maximize short-term profits
Correct Answer: To support green projects that require funding
Solution : The correct answer is (c) To support green projects that require funding
Sustainable initiatives, such as those focusing on environmentally friendly practices and technologies, often require significant upfront investment. These projects may involve research and development of sustainable technologies,
Question : Questions : Business Finance and Its Meaning
Statement 1: Financial planning plays a vital role in allocating funds optimally.
Statement 2: Financial planning focuses solely on marketing and sales strategies.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
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 plays a vital role in allocating funds optimally across various activities and departments within a business. It
Question : Case Study 71
LMN Enterprises is a startup aiming to raise funds for its expansion into international markets. The company's management is considering different methods of raising funds from the capital market.
LMN Enterprises is exploring methods to raise funds from the capital market. Which method involves issuing securities to the public?
Option 1: Private Placement
Option 2: IPO (Initial Public Offering)
Option 3: Rights Issue
Option 4: Follow-on Public Offering (FPO)
Correct Answer: IPO (Initial Public Offering)
Solution : The correct answer is (b) IPO (Initial Public Offering)
An IPO is the process by which a company offers its shares to the public for the first time. LMN Enterprises, as a startup, would go through an IPO to raise capital by
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.
What distinguishes debentures from equity shares in terms of ownership and returns?
Option 1: Debentures provide ownership rights
Option 2: Debentures pay fixed dividends
Option 3: Equity shares have fixed interest rates
Option 4: Equity shares are a form of long-term borrowing
Correct Answer: Debentures pay fixed dividends
Solution : The correct answer is (b) Debentures pay fixed interest
Debentures pay fixed interest to the debenture holders, as they are a form of debt and represent a loan from the debenture holder to the issuing company. In contrast, equity shares represent ownership
Questions : Equity Shares and Preference Shares
How can PQR Enterprises raise funds through convertible preference shares?
Option 1: By issuing shares at a discount
Option 2: By converting shares into debentures
Option 3: By allowing conversion into equity shares
Option 4: By offering fixed interest payments
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
Questions : Different Sources of Finance
In the context of financing, what do we call long-term debt securities issued by companies?
Option 1: Equity shares
Option 2: Preference shares
Option 3: Debentures
Option 4: GDRs
Correct Answer: Debentures
Solution : The correct answer is (c) Debentures
Debentures are long-term debt instruments that companies issue to raise funds. Holders of debentures are creditors to the company and are entitled to receive fixed interest payments and the repayment of the principal amount at maturity. Unlike equity shares,
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
