MANAGEMENT PROGRAMME
Term-End Examination
June, 2015
MS-42 : CAPITAL INVESTMENT AND
FINANCING DECISIONS.
1. What is meant by cost of capital ? How is cost of long term debt and preference share capital
calculated ? Explain.
2. What is meant by a firm's capital structure ? Explain the Modigilian - Miller (MM) theory and
Traditional approach to capital structure of a firm.
3. Explain the concept of project life cycle ? How are the work breakdown structure and linear
responsibility chart prepared ?
4. What is Project Risk ? Briefly explain the techniques used for the measurement of project
risk.
MS-42 1 P.T.O. 5. (a) What do you understand by Asset Securitisation ? Explain the process involved in asset securitisation and its advantages to the parties concerned.
