Financial Management

19 solved questions from Class 12 Business Studies, each with the full working. Tap any question to see the step-by-step solution.

• 1 What is the primary topic or theoretical principle explored in 'Financial Management' (Class 12 BUSINESS-STUDIES)? medium MCQ Chapter Core Principle
• 2 Which key mechanism or analytical rule is highlighted in 'Financial Management'? medium MCQ Key Analytical Mechanism
• 3 What is the primary topic or principle explained in 'Financial Management' (Class 12 Business Studies)? medium MCQ Chapter Core Concept
• 4 Which key observation or fact is central to understanding 'Financial Management'? medium MCQ Key Fact & Mechanism
• 5 Why is the study of 'Financial Management' important for students of Class 12? medium MCQ Learning Significance
• 6 What is a common application or real-world example related to 'Financial Management'? medium MCQ Real World Application
• 7 What key takeaway should students retain after completing 'Financial Management'? medium MCQ Chapter Summary & Takeaway
• 8 A small business has current assets of ₹6,00,000 and current liabilities of ₹2,25,000. Calculate the net working capital required. medium 2 marks Net working capital calculation
• 9 Which of the following is NOT a source of short‑term finance for a manufacturing firm? easy MCQ 1 mark Short‑term sources of finance
• 10 Explain the factors influencing the dividend policy of a company and discuss two common dividend policies with their advantages and disadvantages. medium 4 marks Dividend policy and its determinants
• 11 A company’s capital structure is as follows: Equity ₹5 crore at a cost of 12% per annum, Preference shares ₹2 crore at a dividend rate of 10%, and Long‑term loan ₹3 crore at an interest rate of 9% per annum. The corporate tax rate is 30%. Calculate the weighted average cost of capital (WACC) of the company (in %). hard 3 marks Weighted average cost of capital
• 12 A merchandising firm has current assets of ₹8,00,000, which include inventory worth ₹3,20,000 and receivables of ₹2,00,000. Current liabilities amount to ₹3,00,000. If the firm wants to maintain a cash buffer equal to 10% of its total current assets, calculate the net working capital required. medium 2 marks Net working capital calculation
• 13 Which of the following is NOT considered a source of short‑term finance for a business? easy MCQ 1 mark Sources of short‑term finance
• 14 A company has the following capital components: Equity ₹4 crore at a cost of 14% per annum, Preference shares ₹1.5 crore at a dividend rate of 9%, Long‑term bank loan ₹2 crore at an interest rate of 10%, and Convertible debentures ₹1 crore with an annual coupon of 8% (convertible at a price of ₹100 per share). The corporate tax rate is 30%. Calculate the weighted average cost of capital (WACC) of the company (express your answer in % to two decimal places). hard 3 marks Weighted average cost of capital
• 15 Explain the factors that influence a firm's decision to choose between debt and equity financing. Then evaluate the advantages and disadvantages of (i) a bank loan and (ii) issuing debentures. hard 4 marks Debt vs. equity financing
• 16 A firm has the following capital components: Equity ₹6 crore at a cost of 13% per annum, Preference shares ₹2 crore at a dividend rate of 8%, Long‑term bank loan ₹3 crore at an interest rate of 9%, and Convertible debentures ₹1.5 crore with an annual coupon of 7%. The corporate tax rate is 30%. Calculate the weighted average cost of capital (WACC) of the firm (express your answer in % to two decimal places). medium 3 marks WACC calculation with tax effects
• 17 Which of the following is NOT a source of short‑term finance for a manufacturing firm? easy MCQ 1 mark Short‑term financing sources
• 18 Explain the factors that influence a firm's dividend policy and discuss two common dividend policies along with their advantages and disadvantages. hard 5 marks Dividend policy determinants and types
• 19 A manufacturing firm has current assets of ₹9,50,000, which include inventory ₹4,00,000 and receivables ₹3,20,000. Its current liabilities amount to ₹2,50,000. The firm wants to maintain a cash buffer equal to 15% of its total current assets. Calculate the net working capital required. medium 3 marks Net working capital calculation with cash buffer