MS – 42 June 2013 Capital Investment and Financing Decisions

1. What is cost of capital? How is the cost of long term debt, preference capital, equity capital and retained earnings determined?

2. What is capital structure? Explain the net income, net operating income, M-M approach and traditional theories of capital structure.

3. What do you understand by Economic appraisal and social cost benefit analysis of a project?

4. What is project risk? Explain the various techniques used for measurement of project risk.

5. What is long term financing? Explain the non traditional methods of raising long term financial.

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