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Subject: Business Studies, asked on 31/7/17

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Subject: Business Studies, asked on 31/7/17

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Subject: Business Studies, asked on 31/7/17

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Subject: Business Studies, asked on 29/7/17

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Q. Explain the term trading on equity. Why, when and how can it be used by business organisations?
Ans. Trading on equity refers to proportion of debt in the overall capital.
Financial Leverage = DED=Debt, E=Equity
When during boom period, business must have more of debt less of equity shares in capital structure and during depression when income or return is less we should have more of equity and less of debt in the capital structure.

Subject: Business Studies, asked on 29/7/17

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5.  "Capital structure decision is essentially optimisation of risk / return relationship "  comment.

Ans.  Capital structure of the business offers the profitobility and financial risk. A best capital structure is the one which results in maximising the value of equity shareholder or which brings rise in the price of equity shares.

Subject: Business Studies, asked on 29/7/17

Q. You are the finance manager of a company. The board of directors have asked you to decide the dividend policy. What factors would you keep in mind to perform this function?
Ans. 
  1. Earning - Dividend are paid out of current and previous year's earnings. If there are more earnings then company declares high rate of dividend.
  2. Stability of earnings - Companies having stable or smooth earnings prefer to give high rate of dividend whereas companies with unstable earnings prefer to give low rate of earnings.
  3. Cash flow position - Paying dividend means outflow of cash. Companies declare high rate of dividend only when they have surplus cash. In situation of shortage of cash companies declare no or very low dividend.
  4. Growth opportunities - If a company has number of investment plans then it should reinvest the earnings of the company. As to invest in investment projects, company has two options : one, to raise additional capital of invest its retained earnings. The retained earnings are cheaper source as they do not involve floatation cost on any legal formalities.
  5. Stability of dividend - Some companies follow a stable dividend policy as it has better impact on shareholder and improves the reputation of company in the share market.
  6. Preference of shareholders - Another important factor affecting dividend policy is expectation and preference of shareholders as their expectations cannot be ignored by the company. Generally, it is observed that retired shareholders expect regular and stable amount of dividend whereas young shareholders prefer capital gain by reinvesting the income of the company.

Subject: Business Studies, asked on 24/7/17

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Subject: Business Studies, asked on 24/7/17

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Subject: Business Studies, asked on 12/7/17

what are the key elements in the concept of planning

Subject: Business Studies, asked on 7/7/17

Shift from the demand for aircrafts to airbus includes which type of general forces? Please Explain also

Subject: Business Studies, asked on 7/7/17

Boost in the fashion industry is an economic forces or social forces? Explain also why not the other one

Subject: Business Studies, asked on 7/7/17

If it is written that tobacco is banned as it is injurious to health then is there any dimensions of business environment highlighted here other than legal? Explain if yes.

Subject: Business Studies, asked on 7/7/17

What is meant by internal borrowings taken by government

Subject: Business Studies, asked on 2/7/17

Will i get marks if i write the importance of business environment headings as given in the revsion notes,or i have to write same as text book

Subject: Business Studies, asked on 25/6/17

what is the significance of understanding rnvironment in shaping the future of business

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