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There are some most probable questions of Financial Management for SMU MBA examination in the process of examination questions for financial management. You should read SMU MBA assignments also for the assignment preparation.

1. Set A

a) Horizontal merger
b) Vertical merger
c) Lateral merger
d) Conglomerate merger
e) Concentric merger

Set B

i) segments brought together to carry over specific mgmt. functions
ii) two or more firms producing unrelated products
iii) firms producing different products related in some way
iv) different stages of the production of the same product
v) producing same product or doing the same business

A) (a- i) (b-ii) (c-iii) (d-iv) (e-v)
B) (a-ii) (b-i) (c-iv) (d-iii) (e-v)
C) (a-v) (b-iv) (c-iii) (d-ii) (e-i)
D) (a-iii) (b-iv) (c-iv) (d-ii) (e-i)

2.2 + 2 = 5 is the phenomenon known as

A) Economies of scale
B) Reverse synergy
C) Synergy
D) Divesture

3. ——— represent the sale of a segment of a company to a third
Party

A) Restructuring
B) Divestiture
C) Diversification
D) Merger

4. When an existing parent company distribute on a pro rata basis
the shares of the new company to the shareholders of the parent company free of cost.

A) Sell off
B) Spin off
C) Equity carve out
D) Bust ups

5. ESOP stands for

A) Employers’ stock option plan
B) Employees’ stock option plan
C) Employees’ share option plan
D) Equity stock option plan

6. Agreement which allows the bondholder to demand repayment of the amount in the event of hostile takeover

A) Poison pills
B) Poison out
C) White knights
D) Green mail

7. Arrange in sequence the steps of financial planning

i) Laying down the financial procedures
ii) Financial planning
iii) Formulation of financial policies
iv) Setting financial objectives
v) Determination of the form of securities to be issued
vi) Estimating the capital requirement

A) i, iv ,ii, iii, v, vi
B) vi, v, iv, iii, ii, i
C) vi, v, iv, iii, i, ii
D) iv, v, iii, ii, i, vi

8. ——– means the amount of capital employed or invested in a
business.

A) Cost of capital
B) Capital structure
C) Equity capital
D) Capitalization

9. When the actual capitalization of a company is more than the proper capitalization?

A) Under capitalization
B) Excess capital
C) Over Capitalization
D) Inadequate capital

10. ——– means the allocation of the limited funds available for financing the capital projects to only some of the profitable projects in such a manner that the long term returns are maximized.

A) Capital budgeting
B) Capitalization
C) Capital structure
D) Capital rationing

11. The ——— is the variability between the two returns, the ——– is the risk involved in the project.

A) greater, greater equal to
B) greater, lower
C) greater, more
D) lower, greater

12. ———- is a way of analyzing the changes in the NPV or IRR of a project to a given change in one variables of capital investment proposal like the estimated cash inflows etc.

A) Linear programming
B) Sensitivity analysis
C) Simplex method
D) Decision analysis

13. ——– is/ are statistical technique of risk measurement in capital budgeting.

A) Sensitivity analysis B) Standard deviation method
C) Both A & B D) None of these