Q1. A. Select the proper option from the option given below and rewrite the sentences: (5)

  1. Big retail stores requires large amount of ______________ capital.
  2. fixed
  3. working
  4. loan
  1. Preference shares carry dividend at ____________ rate.
  2. fixed
  3. fluctuating
  4. lower
  1. If a share of Rs. 100 is issued at RS. 110, it is said to be issued at __________ .
  2. par
  3. profit
  4. premium.
  1. The company has to obtain consent of __________ if issue of debentures exceeds Rs. 1 crore.
  2. SEBI
  3. Registrar
  4. National Stock Exchange.
  1. A company must give receipt for deposit to the depositor within ______ weeks of its acceptance.
  2. two
  3. four.
  4. eight.

B. Match the correct pairs: (5)

Group ‘A’ Group ‘B’
1. Financial Managementa. Distribution of profit
2. Retained profitb. Deposits less than Rs. 20,000
3. Debenture trusteesc. Capitalisation of profit.
4. Small depositorsd. 1996
5. Depository Acte. Management of business funds.
f. Borrowed capital
g. Protect interest of debentures holders
h. Management of business activities.
i. Deposits less than Rs. 25,000
j. 1956

C. Write a word or a term or a phrase which can substitute each of the following statements. (5)

  1. The type of shareholders who can participate in the management of the company.
  2. A document which is an invitation in general public to subscribe for share of company.
  3. The maximum period upto which deposits can be accepted.
  4. An organisation where securities / shares are held in electronic form.
  5. Dividend declared by a company at its annual general meeting.

Q2. Distinguish between the following. (Any Three)  (15)

  1. Fixed capital and working capital
  2. Equity Shares and Preference Shares.
  3. Share certificate and Share Warrant.
  4. Interim dividend and Final dividend.
  5. Money market and Capital Market.

Q3. Write notes on (Any Three) (15)

  1. Trade credit
  2. Employee stock option scheme.
  3. Statutory conditions of allotment of shares.
  4. Procedure for conversion of debentures.
  5. Methods of redemption of debentures.

Q4. State with reasons, whether the following statements are True or False. (Any Three) (15)

  1. Financial management is essential for all types of organisations.
  2. The bond holders are owners of the company.
  3. Transfer of shares is initiated by the company.
  4. Debenture holders are creditors of the company.
  5. Depositors’ approval is must for renewal of deposit.

Q5. Attempt the following (Any TWO) (10)

  1. Write a letter regarding payment of interest on debentures.
  2. Draft a letter of thanks to the depositor of a company.
  3. What are the points to be borne in mind while writing letters to the members?
  4. State the preliminary steps in the issue of shares.

Q6. Write a letter to a shareholder regarding issue of bonus shares. (10)


Define ‘debenture’ and explain the types of debentures.