NATIONAL OPEN UNIVERSITY OF NIGERIA
14-16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS
SCHOOL OF MANAGEMENT SCIENCES
MARCH 2014 EXAMINATION
COURSE CODE: BHM 805 CREDIT UNIT: 3
COURSE TITLE: CORPORATE FINANCE
TIME ALLOWED: 2 HRS 30 MINS
QUESTION ONE IS COMPULSORY. M.Sc STUDENTS ARE REQUIRED TO ANSWER ANY ADDITIONAL TWO QUESTIONS OF THEIR CHOICE. MBA STUDENTS ARE REQUIRED TO ANSWER ANY ADDITIONAL THREE QUESTIONS OF THEIR CHOICE.
1(a) Explain six (6) factors that determine the capital structure of a business?
(b) List four (4) factors that determine a firm’s ability to sustain growth?
(c) Write short notes on the following:
1. Working Capital
2. Cost of Capital
3. Internal Equity
4. Business Risk Premium
5. Convertible Securities
6. External Equity
7. Financial Risk Premium
8. Capital Structure
2(a) What are the characteristics of the right objective function of
shareholder wealth maximization?
(b) State the assumptions that must be made to maximize stakeholder wealth?
3(a) What are the factors that you must put into consideration if you want to
start a sole proprietorship business?
(b) What is an Agency Cost? Discuss direct and indirect agency costs?
4(a) What are the important factors to consider in partnership business?
(b) Financial market can be divided into two what are they? Explain.
5(a) Discuss some of the limitations of Financial ratios?
(b) Why are Convertible Securities issued?
6(a)What is an Option? Explain what you understand by a Put and a Call option?
(b) Explain ways in which an organization can achieve growth?
For the 2015 – till date past questions for this course CLICK HERE
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