CS Executive Financial and Strategic Management PYQ December 2020: Question Paper and Available Answers
CS Executive
Financial and Strategic Management
PYQS Series
December 2020
100 Questions Indexed
ICSI Examination Archive & Suggested Answers: This directory contains indexed questions from the paper for CS Executive Financial and Strategic Management PYQS (December 2020). Open the source paper and available answers. Older sessions follow the syllabus and statutory provisions applicable to their examination year.
Indexed questions
- Find the correct statement regarding the profit maximisation:
- From which of the following, Economic Value Added (EVA) will not increase :
- ____________ is the most appropriate goal of the firm.
- Earnings per share can be calculated as:
- Investment Decision in Financial Management does not include :
- The main function of a financial manager include the following except :
- The present value of ₹1,000 to be received after one year at the rate of 8% per annum is ₹926, if discounted half yearly, the present value would be :
- What is the present value of the maturity value of ₹10,000 which has been given on 15% interest for five years while required rate of return is 10%? (FV @ 15% after 5 years is 2.01
- MNP Ltd. is considering purchasing of an Asset costing ₹80,000 and having a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are ₹25,000 p
- ABC project has the following cash inflows for 4 years as ₹34,444; ₹39,877; ₹25,000; and ₹52,800 respectively. The initial Investment is ₹1,04,000. Find the correct statement from
- A firm expects an NPV of ₹8,000 if the economy is exceptionally strong (30% probability), an NPV of ₹4,000 if the economy is normal (40% probability), and an NPV of ₹2,000 if the e
- Calculate the value of the firm MNP Ltd. according to the Net Income Approach. The company expects a net operating income of ₹80,000. It has ₹2,00,000, 8% Debentures. The equity ca
- ABC Ltd. expects a net operating income of ₹1,00,000. It has ₹5,00,000, 6% Debentures. The overall capitalization is 10%. Calculate cost of equity according to the Net Operating In
- Compute the average cost of capital by using market value as weights from the following information: Net Operating Income ₹2,00,000, Total Investment ₹10,00,000, if the firm uses 5
- A company PQR Ltd. has EBIT of ₹2,00,000. Expected return on its Investment @of 12%. What is the total value of the firm according to Miller-Modigliani theory?
- A firm has EBIT of ₹50,000. Market value of debt is ₹80,000 and overall capitalization rate is 20%. Market value of equity under NOI Approach is:
- X company has sales of ₹12,00,000, Variable Cost is 50% and fixed cost ₹2,50,000. Operating leverage of the company is :
- A Ltd. issues ₹50,000 8% debentures at a discount of 5%. The tax rate is 50%. The cost of debt capital is:
- A company issues 10,000 10% Preference Shares of ₹100 each redeemable after 10 years at a premium of 5%. The cost of issue is ₹2 per share. The cost of preference capital is:
- Number of existing equity share = 8 crore, Market value of existing share = ₹55, Net earnings = ₹80 crore. Cost of equity on basis of Earning-price Ratio approach is :
- ABC Ltd. has the following capital structure: Equity share capital ₹10,00,000, 10% preference share capital ₹5,00,000, 8% Debenture ₹15,00,000. Cost of equity is estimated to be 15
- Find the correct statements regarding the risk-adjusted discount rate (RADR) approach ?
- PQR Ltd. keeps a perpetual fixed amount of debenture with coupon rate of 16% in its books. Debenture sells at par (face value ₹100) in the market and company pays 40% tax. What is
- ANT Corporation common stock has a beta, (β), of 1.5. The risk-free rate is 8%, and the market return is 12%. Determine the cost of equity shares using the CAPM.
- MNP Ltd. has a target capital structure of 60 percent common stock, 10 percent preferred stock, and 30 percent debt. Its cost of equity is 15 percent, the cost of preferred stock i
- A company has currently 2,000 equity shares of ₹100 each and its earnings are ₹20,000. Its current market price is ₹110 and the growth rate of EPS is expected to be 5%. The cost of
- A firm provides the following information : Sold 2,00,000 units @ ₹30 per unit; Variable cost ₹15 per unit, fixed cost ₹10,00,000 and debt of ₹10,00,000 at 10% rate of interest. Ca
- SKY Ltd. is considering three different financing alternatives — debt, preferred stock and common equity. The firm has created an EBIT-EPS chart that shows several indifference poi
- Which one is not a characteristics of Little-Mireless (L-M) approach ?
- Different aspects of UNIDO approach of social cost benefit analysis are examined in how many stages ?
- The earning per share of a company is ₹10. It has an internal rate of return of 15% and the capitalization rate of the same risk class is 12.5%. If Walter's model is used, what sho
- From the following information find the market value per share as per Walter's model: Earnings of the Company ₹5,00,000, Dividend Payout ratio 60%, No. of shares outstanding 1,00,0
- Modigliani and Miller argue that the dividend decision ............
- Determine the market price of a share of XYZ Ltd. as per Gordon's Model, given equity capitalisation rate = 11%, Expected Earning = ₹20, rate of return on investment = 10% and rete
- A Company Ltd., has 50,000 shares outstanding. The current market price of the shares is ₹50 each. The company expects the net profit of ₹1,00,000 during the year and it belongs to
- Which of the following statements is not true in the context of M-M's dividend theory ?
- The annual cash requirement of A Ltd. is ₹25 lakh. Cost of conversion of marketable securities per lot is ₹2,500. The company can earn 5% annual yield on its securities. What will
- The following details are available in respect of a firm: Annual requirement of inventory 20,000 units, Cost per unit (other than carrying and ordering cost) is ₹10, Carrying cost
- What will be the operating cycle period if raw materials are in store for 2 months, processing time 2½ months finished goods remain in store for 15 days, debtors are allowed 60 day
- Current assets are twice the current liabilities. If the net working capital is ₹60,000, current assets would be :
- Concept of Maximum Permissible Bank financial was introduced by:
- Reorder level + Reorder Quantity – (Minimum Consumption × Minimum delivery period) determines which stock level :
- Efficiency of a credit control system does not get influenced by:
- Before taking investment decision, an investor makes a comparison of the ............ available from each avenue and elements of ............ involved in it.
- Speculator is a person :
- An investor is holding 100 shares of PQR Ltd. The current rate of dividend paid by the company is ₹10 per share. The long-term growth rate is expected to be 10% and the expected ra
- According to ............ theory, it is futile to engage in Technical analysis.
- Which of the following statement defines the efficient market ?
- ............ focus more on past price movements of firm's stock than on the underlying determinants of future profitability.
- If the markets are efficient, the security price provides :
- Consider a graph with standard deviation on the horizontal axis and expected return on the vertical axis. The line that connects the risk-free rate and the optimal risky portfolio
- If the standard deviation of a portfolio return is 15% and risk tolerance level for the investor is 40. What will be the risk penalty for the investor ?
- Which of the following is the equation of the Security Market Line (SML) ?
- Capital Asset Pricing Model (CAPM) Account for ............
- When a portfolio comprises investment in three shares (Share A — 40%, Share B — 25% and Share C — 35%) whose beta factors are 1.3, 1.6 and 1.2, respectively, the portfolio beta is
- If the risk free rate of interest is 11% and expected return on market portfolio is 18%, ascertain expected return of the portfolio if β of portfolio is 0.90.
- The unsystematic risk is explained :
- The standard deviation of market returns is 15. The return of stock X is 25%. The riskless rate of interest is 5%. The risk premium of the X stock is:
- The Sharpe index assigns the high value to funds that have :
- JP Limited has earned 10% return on total assets of ₹18,00,000 and has a net profit ratio of 8%. Find out sales of the company.
- Generally in what order managers perform their managerial functions ?
- The famous book “The Management Theory of Jungle” is written by:
- At what level of an organisation does a corporate manager operate ?
- Consider the following statements : Planning involves (1) Establishment of objectives (2) Choose of alternative courses of action (3) Delegation of authority (4) Decision only by p
- When a manager monitors the work performance of workers in his department to determine if the quality of their work is 'up to standard', this manager is engaging in which function
- Following are controlling functions of the management? (1) Analysis of variances (2) Initiating corrective action (3) Measurement of Actual performance (4) Establishment of standar
- ............ is a conscious attempt made by the executive to influence the role of individual and group behaviours.
- What is the term for the action in which managers at an organisation analyse the current situation of their organisation and then develop plans to accomplish its mission and achiev
- Match the following Porter's five forces factors: (a) Brand reputation and Government regulation (1) Buyer power (b) Materials scarcity and Threat of integrating forward (2) Rivalr
- In the business, Macro environment factor, what does PEST stand for?
- Profitability stemming from how well a firm positions itself in the market is a key feature of which writer's view on strategy ?
- Porter's Value Chain is essentially a tool for:
- ............ refers to key strategic leadership roles in which a leader quickly and clearly works through the complexity of key issues problem and opportunities to affect actions.
- The ............ answers the question “Where do we aim to be”? Whereas ............ answers the questions “What we do ? What makes us different?”
- Large organizations create ............, which assume the role of a separate company and create their own strategies and plans in order to achieve their corporate goals and contrib
- Guidelines developed by an organization to govern the actions of those who are a part of it, is known as:
- The ............ process commences at corporate level. Here the organization sets out its overall mission, purpose, and values.
- The marketing strategy emphasises price as the key to good value; operations runs with tight cost control; development focuses on cost reduction. Which of the competitive strategie
- Which of the following statements are correct? (1) Supply chain management is a narrower concept than logistics management. (2) Reduction of inventory is a key objective of logisti
- Statement (I): Stars operate in low growth industries and maintain high market share. Statement (II): "Dogs" have weak market share in high-growth market. Codes:
- Which of the following is the Strategy of TOWS?
- The two internal elements of SWOT analysis are:
- In SWOT analysis, situations in which firms could convert weaknesses into strengths and threats into opportunities, known as :
- Which can be termed as disadvantage of PERT?
- What is the term used in Ansoff's matrix for increasing market share with existing products in new markets ?
- Porter's generic strategies are:
- A sudden increase in critical resources which may invite an immediate reassessment of the organization strategy is an example of :
- Strategic changes that most of the companies pursue are the following except :
- If misinformation and lack of information create barriers in managing change, it can be managed by:
- Important benefits of McKinsey's 7-S framework Model is/are as follows:
- Restructuring and downsizing becomes necessary due to the following factors except:
- In ............ structure, the activities are grouped according to the types of products manufactured or different market territories as the organizations began to grow by expandin
- What is the term for the monitoring of events both internal and external to the organisation that affects strategy ?
- Improving quality through small, incremental improvements is a characteristic of what type of quality management system?
- Where was Total Quality Management first developed ?
- Which of the following are key components of a Total Quality Management system ?
- Match the following benchmarking events with historical development : Benchmarking History Years (a) Reverse Engineering (1) 1982-1986 (b) Process benchmarking (2) 1976-1986 (c) St
- In Six sigma, DMAIC stands for :
- In TQM, which of the following is not classified as 'costs of non-conformance'?
- "Six Sigma" management has several levels of certification. It does not include:
How to Prepare for CS Executive Financial and Strategic Management
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