Financial Management AU 2020


1. It is usual to declare good dividends when the company is making good profit. It is profitable for companies not to declare any dividend even when they are making good profits. What will be the reaction of the shareholders? – Discuss.

2. “In managing working capital the finance manager faces the problem of compromising the conflicting goals of liquidity and profitability”. – Comment. What strategy should the finance manager develop to solve this problem?

3. Design an appropriate capital structure which yield more profitability for a service industry. Illustrate your answer with the help of EBIT-EPS analysis.

4. “The success of a business concern depends upon the way in which it’s earnings are computed, distributed and retained”- Comment on this statement.

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