Financial Management and Strategic Management - September 2025

(a) The capital structure of RSA Limited is as under: Equity Shares (` 10 per share) 8% Irredeemable Preference Shares (`100 per share) 1,00,00,000 5,00,00,000 Additional Information: (i) Equity shares are quoted at ` 60 each and a new issue priced at ` 60 will be fully subscribed; flotation cost will be ` 4 per share. (ii) Issue price of the 8% Irredeemable preference shares was ` 45. (iii) Current market price of the 8% irredeemable preference shares is `…

M/s KRY Limited is a mid-sized company engaged in manufacturing and sales of Industrial equipment. The capital structure of the company is as under: Equity Share Capital (12,500 Shares of `100 each) `12,50,000 6% Debentures ` 50,00,000 8% Bank of Loan XXXXX Other information are as under: Total Sales ` 75,00,000 P/V Ratio 40% Operating Leverage 2.4 Corporate Tax Rate 3.84 Corporate Tax Rate 30% P/E Ratio 8 You are required to calculate following: (i) Earnings Before Interest and Tax…

(a) AVS Limited is planning to diversify its cotton manufacturing business. The Chief Financial Officer (CFO) intends to raise fund of ` 22,00,000 for this project. The current estimates of Earnings Before Interest and Taxes (EBIT) from the new project are ` 5,00,000 per annum. The company's share is currently selling at ` 120 and is expected to decline to ` 110, in case the funds are borrowed more than ` 10,00,000. It is stated that the cost of debt…

(a) Discuss any 2 advantages and limitations of Stock Splits. (4 Marks) (b) Explain in brief the following types of bonds: (i) Callable Bonds (ii) Puttable Bonds (iii) Masala Bonds (iv) Drop Lock Bonds (4 Marks) (c) Explain two basic functions of Financial Management. (2 Marks) (c) Explain any two limitations of profit maximization objective of Financial Management. (2 Marks) (a) Advantages of Stock Splits 1. It makes the share affordable to small investors. 2. Number of shares may increase…

(a) ARP Motors, an automobile company, was struggling in the competitive SUV market in India. As a business strategist, you recommended that ARP launch a compact SUV that balances affordability with premium features. In response, ARP developed and introduced FLEXON, strategically pricing it and incorporating high-end features such as a 5-star Global NCAP safety rating, a modern design and an advanced technology. Furthermore, the company expanded into the electric vehicle segment with FLEXON EV, positioning it as one of the…

(a) "A well-defined vision and mission statement provide direction and purpose to an organization." Explain the significance of vision and mission statements in strategic planning. (5 Marks) (b) Which concept explains the efficiency increase gained by worker through repetitive production work, leading to cost reduction and competitive advantage? List down its relevance features in strategic management. (5 Marks) 22 FINANCIAL MANAGEMENT AND STRATEGIC MANAGEMENT (a) Strategic Management is a dynamic process of formulation, implementation, evaluation and control of strategies to…

(a) "The primary objective of SWOT analysis is to help organizations develop a full awareness of all factor involved in making a business decision." In the light of the above statement, explain why is it necessary to do SWOT analysis for business organization before using the strategy. (5 Marks) (b) “In a dynamic business environment, merger serves as a critical tool for companies seeking expansion, synergy creation and competitive advantage.” Discuss the concept of mergers, their classifications and their impact…

(a) “A close and continuous interaction between a business and its environment helps in strengthening the business firm and using its resources more effectively." Explain Business environment and discuss how does the interaction between a business and its environment helps the business firm. (5 Marks) (b) “Many managers fail to distinguish between strategy formulation and strategy implementation. Yet, it is crucial to realize the difference between the two because they both require very different skills.” On the basis of this…