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NATIONAL OPEN UNIVERSITY OF NIGERIA
UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2018 EXAMINATION
COURSE CODE: BFN 805 CREDIT UNIT: 2
COURSE TITLE: CORPORATE FINANCE
TIME ALLOWED: 2 HOURS
Instructions:
- Attempt question number one (1) and any other two (2).
- Question number 1 is compulsory and carries 30 marks while the other 2questions carry 20 marks each. Present all your points in coherent and orderly manner.
1a. To help ease the burden of bookkeeping, budgeting and reporting, there are a variety of corporate finance tools on the market; using them may lead to greater efficiencies. Discuss four (4) of such tools. (16 marks).
1b. What are the characteristics of ‘right’ objective function? (8 marks).
1c. Discuss three (3) advantages the separation of ownership from management gives the corporation over partnership and sole proprietorship. (6 marks).
2a. In the corporate world, what do you understand by Agency Relationship? (5 marks).
2b. Define Financial Market. (4 marks).
2c. Delineate functions of the financial market. (11 marks).
3a. What is an Income Statement? What are the four (4) sections of an income statement? (6 marks, 4 marks).
3b. Fundamental Classification is one of the bases for classifying financial ratios. Discuss the five (5) groups involved. (10 marks).
4a. Briefly discuss Working Capital Management and enunciate the components of working capital. (10 marks).
4b. Discuss any five (5) determinants of the capital structure of a business enterprise. (10 marks).
5a. With examples state what you understand by Financial Security? (5 marks).
5b. Discuss any five (5) ways in which an organizations can achieve growth. (15 marks).
