IGNOU SOLVED ASSIGNMENT 2017-18

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IGNOU M.COM Assignemnts Solved

M.COM SOLVED ASSIGNMENTS FOR STUDENTS OF 2018:

1st YEAR ASSIGNMENTS

1. IBO-01: International Business Environment
2. IBO-02: International Marketing Management
3. IBO-03: India's Foreign Trade
4. IBO-04: Export Import Procedure and Documentation
5. IBO-05: International Marketing Logistics
6. IBO-06: International Business Finance

2nd YEAR ASSIGNMENTS

1. MCO-01 : Organization Theory and Behaviour
2. MCO-03 : Research Methodology and Statistical Analysis
3. MCO-04 : Business Environment
4. MCO-05 : Accounting of Managerial Decisions
5. MCO-06 : Marketing Management
6. MCO-07 : Financial Management

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MCO-7: Financial Management

Question No.1. (a) “ Financial Management is more than procurement of funds.” Explain.

(b) How is wealth maximization a better criterion than profit maximization?

Question No.2. (a) What is capital budgeting decision? Why is it significant for a firm?

(b) Explain the features of an appropriate capital structure.

Question No.3. (a) Define cost of capital. Explain its relevance in financial decision making of a firm.

(b) Explain different approaches to the computation of cost of equity capital.

Question No.4. From the following information of Company ‘A’ & Company ‘B’, compute (1) Operating leverage (2) financial leverage and (3) combined leverage.

Particulars	Company A (Rs.)	Company B (Rs.)
Equity Capital	6,00,000	3,50,000
12% Debenture	4,00,000	6,50,000
Output per annum (in units)	60,000	15,000
Selling Price per unit	30	250
Fixed per annum	7,00,000	14,00,000
Variable Cost per unit	10	75

Question No.5. (a) Discuss the factors affecting the dividend policy of a company.

(b) Explain the methods of monitoring receivables.

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MCO-06 : Marketing Management

Question No. 1. What steps are involved in conducting a marketing research? Discuss them with the help of a hypothetical marketing research project. Click Here for Solution

Question No. 2. Explain the relationship between market segmentation, targeting and positioning? Discuss various market targeting strategies adopted by companies. Click Here for Solution

Question No. 3. “A series of step by step process is involved in developing a product.” Describe. Click Here for Solution

Question No. 4. Why geographical distribution of consumers is important in pricing decision? Explain various methods of geographical pricing. Click Here for Solution

Question No. 5. Comment upon the following statements: a) “No matter how well channels are designed and managed, there will be some conflict.” Click Here for Solution

b) “There is a difference between advertising and publicity.” Click Here for Solution

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Cost of Equity Capital Approaches

Question No.3. (b) Explain different approaches to the computation of cost of equity capital.

Solution: The following are the approaches to computation of cost of equity capital:

1. E / P Ratio Method: Cost of equity capital is measured by earning price ratio. Symbolically:

2. E / P Ratio + Growth Rate Method: This method considers growth in earnings. A period of 3 years is usually being taken into account for growth. The formula will be as follows:

Where (1 + b) 3 = Growth factor where b is the growth rate as a percentage and estimated for a period of three years.

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Cost of Capital and its Relevance in Financial Decision Making

Question No.3. (a) Define cost of capital. Explain its relevance in financial decision making of a firm.

Solution: The term cost of capital refers to the minimum rate of return which a firm must earn on its investments so that the market value of the company's equity shares does not fall.

Meaning of Cost of Capital

Hampton, John defines the term as "the rate of return the firm requires from investment in order to increase the value of the firm in the market place". The following are the basic characteristics of cost of capital:

i) Itl is a rate of return, It is not a cost as such. ii) This return, however, is calculated on the basis of actual cost of different components of capital. iii) A firm's cost of capital represents minimum rate of return that will result in atleast maintaining (If not increasing) the value of its equity shares. iv) It is related to long term capital funds. v) It consists of three components: a) Return at Zero Risk Level. (R0) b) Premium for Business Risk (b) c) Premium for Financial Risk (f) vi) The cost of capital may be put in the form of the following equation : K = R0 + b + f Where K = Cost of Capital R0 = Return at Zero Risk Level b = Premium for Business Risk f = Premium for Financial Risk

A firm's cost of capital has mainly three risks:

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CAPITAL STRUCTURE FEAUTURES

Question No. 2. (b) Explain the features of an appropriate capital structure.

Solution: The optimal capital structure of a firm should have the following features:

1. Return

The objective of firm should be to have optimal debt in the capital structure, which yields maximum return to the shareholders i.e. to increase return on equity (ROE) with the same level of return on assets (ROA).

ROE = ROA + (D/E) [ROA – I (1-Tc)] Where: D = Proportion of debt in the capital structure E = Proportion of equity in capital structure I = Interest rate (current yield to maturity) on debt Tc = Corporate income tax rate

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