Business Studies

Class XII-CBSE

Test Paper

Time 1 hr
M. 40

M.

Question 1 to 8 consists of 2 marks each

Question 9 to 14 consists of 4 marks each
1. Name the cheapest source of finance to a company.
2. What is meant by Capital Structure?
3. What is the link between operating cycle and working
capital?
4. Why investors want dividend?
5. Cost of debt is lower than the cost of equity share capital
Give reasons why even then a company cannot work only
with the debt.
6. What is financial risk? Why does it arise?
7. What is the main objective of financial management?
8. How does cost of capital affect the capital structure of a
company?
4 Marks Questions

1. Length of production cycle affects the working capital

requirements of an organisation. Explain
2. What do you mean by Financial Leverage? Explain
3. Tax benefit is available only in case of payment of interest
and not on the payment of preference dividend Why.
4. A Capital budgeting decision is capable of changing the
financial fortune of a business. Do you agree? Why or Why
not?
5. Explain the factors affecting the dividend decision.
6. Financial planning does not serve any useful purpose
Comment

Prepared by: Sanjay Bhatia