Q 1:- Scope of financial management? Ans:- We can divide financial management scope into three major parts:1.

Financial Management in New Companies A new company spends large amount on production and marketing but it should ignore proper use of its fund. Financial managements gateway is new company and if new company ignores financial management study, it means it is ignoring cash, inventory,debtors and fixed assets management. Past study reveals that big organization or companies did not trade even one year and before one year they took their baggage and became liquidated. Why? Because, given debt was demanded from these companies bycreditors. By answering no, court had liquidated them. So, if you are starting new company, become regular readers of financial management. 2. Financial Management in Old Companies Old company can survive in long run, if it is capable to pay debt timely, to pay salary on time and to pay other daily expenses. Because old company has good reputation in , so financial managements some part like working capital management is very significant. Old company should try to increase growth rate by using new techniques of financial management. 3. Financial Management in NGO In this material age, every work is becoming business. Only NGO are working not for profit aim. Its aim is not to earn money but here is also question of its existence. Like survive of company, NGO can live only and only after proper management of its cost and management of cost can be taught only in financial management. So, NGO are also under the scope of financial management. Every NGO wants to provide free services long time. Without, use the techniques of financial management, NGO starts misuse the scarce sources of public. After revealing this fact, public may reduce to donate to NGO, so NGO should be aware about financial management.

Q2:- What is Time Value OF money? Ans:- Time Value of Money (TVM) is an important concept in financial management. It can be used to compare investment alternatives and to solve problems involving loans, mortgages, leases, savings, and annuities. TVM is based on the concept that a dollar that you have today is worth more than the promise or expectation that you will receive a dollar in the future. Money that you hold today is worth more because you can invest it and earn interest. After all, you should receive some compensation for foregoing spending. For instance, you can invest your al

year. You can say that the future value of the dollar is $1.06 given a 6% interest rate and a one-year period. It follows that the present value of the $1.06 you expect to receive in one year is only $1. A key concept of TVM is that a single sum of money or a series of equal, evenly-spaced payments or receipts promised in the future can be converted to an equivalent value today. Conversely, you can determine the value to which a single sum or a series of future payments will grow to at some future date.

Q3:- What is Capital Structure? Ans:- In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include dozens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e.g. by taking a short term loan etc. The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern thinking on capital structure, though it is generally viewed as a purely theoretical result since it disregards many important factors in the capital structure decision. The theorem states that, in a perfect market, how a firm is financed is irrelevant to its value. This result provides the base with which to examine real world reasons why capital structure is relevant, that is, a company's value is affected by the capital structure it employs. Some other reasons include bankruptcy costs, agency costs, taxes, and information asymmetry. This analysis can then be extended to look at whether there is in fact an optimal capital structure: the one which maximizes the value of the firm.

Q3:- Explain the term given below? Ans:- 1.white Night:- A company that comes to the rescue of another listed company when it is under siege from an unwelcome bidder (sometimes called a black knight), often at the request of the targets management. The white knight may make an

improved offer, or it may just be a more acceptable predator than the first bidder, as far as the management is concerned. 2.Poision Pill:- Anti-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the firm or shares of anyone who acquires the firm at a deep discount to their fair market value. Named after the cyanide pill that secret government agents are said to be instructed to swallow if capture is imminent. Or A plan or tactic intended to make a hostile corporate takeover prohibitively expensive, as one in which a company's stockholders are offered shares of stock at a bargain price in the event that a single suitor acquires a high percentage of the stock. 3. Economic value added :- In corporate finance, Economic Value Added or EVA, a registered trademark of Stern Stewart & Co., is an estimate of a firm's economic profit being the value created in excess of the required return of the company's investors (being shareholders and debt holders). Quite simply, EVA is the profit earned by the firm less thecost of financing the firm's capital. The idea is that value is created when the return on the firm's economic capital employed is greater than the cost of that capital; seeCorporate finance: working capital management. This amount can be determined by making adjustments to GAAP accounting. There are potentially over 160 adjustments that could be made but in practice only five or seven key ones are made, depending on the company and the industry it competes in 4.Corporate Restructing:-