Arts (English Medium) Class 12 - CBSE Question Bank Solutions

Explain the following as factors affecting the choice of capital structure:

Flexibility

Explain the following as factors affecting the choice of capital structure:

Risk Consideration

Explain the following as factors affecting the choice of capital structure:

Control

Explain any four factors that affect the choice of capital structure of a company. 

Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwave ovens, refrigerators and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production department blames marketing for not meeting sales targets and marketing blames production department for producing goods, which are not of good quality meeting customers’ expectations. The finance department blames both production and marketing for declining return on investment and bad marketing. State the quality of management that the company is lacking? What quality of management do you think the company is lacking? Explain briefly. What steps should the company management take to bring the company back on track?

Coordination is the essence of management. Do you agree? Give reasons.

What is meant by capital structure?

Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose the company needs additional Rs. 80,00,000 for replacing machines with modern machinery of higher production capacity. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was Rs. 8,00,000 and total capital investment was Rs. 1,00,00,000. Suggest whether issue of debenture would be considered a rational decision by the company. Give reason to justify your answer. (Ans. No, Cost of Debt (10%) is more than ROI which is 8%).

Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.

“Capital structure decision is essentially optimisation of risk-return relationship.” Comment.

The workers of a factory remain idle because of lack of knowledge of hi-tech machines. Frequent visit of engineer is made which causes high overhead charges. How can this problem be removed. (vestibule training)

Explain the term ‘Trading on Equity’? Why, when and how it can be used by company.

‘ No organisation can be successful unless it fills and keeps the various positions filled with the right kind of people for the right job.’ Elucidate

What are the advantages of training to the organisation?

The workers always try to show their inability when any new work is given to them. They are always unwilling to  take up any kind of work. Due to sudden rise in demand a  firm wants to meet excess orders. The supervisor is finding  it difficult to cope up with the situation. State the element of directing that can help the supervisor in handling the  problem .

Explain the process of motivation with the help of a diagram.

What are the objectives of SEBI?

Explain the objectives and functions of the SEBI.

India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics Rs.4,200-crore initial public offering.

a. Which market is being reflected in the above case?

b. State which method of floatation in the above identified market is being highlighted in the case? (Primary Market)

c. Explain any two other methods of floatation. (Private Placement, Offer through prospectus, offer for sale).

Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.