IGNOU MMPF-002 December 2025 Previous Year Question Paper

Q1.Why is the cost of capital considered as the minimum acceptable rate of return on [ 2 ] MMPF–002 investment ? Explain the various methods used for calculating cost of equity capital.

Q2.Explain the distinguishing features of a project. Discuss the concept of project life cycle and explain its application in project management.

Q3.What is Social Cost-Benefit Analysis (SCBA) ?

Q4.Explain the concept of market failures in the context of SCBA.

Q5.What do you understand by Asset Betas and Equity Betas ? Discuss the factors determining Asset Betas.

Q6.Write short notes on any four of the following :

(i) Scenario Analysis [ 3 ] MMPF–002

(ii) Warrants

(iii) Euro Currency Market

(iv) Sponsored and Unsponsored Depository Receipts

(v) Portfolio Funds

Q7.What is Financial Engineering ? Discuss the factors contributing to Financial Engineering and give few examples of financial engineering in fixed income securities.

Q8.What is I nvestors Relations ? What are the forces that drive for information from the company ? Explain the nature of information demanded by different stakeholders. [ 4 ]

Q9.ABC Ltd . has the following capital structure : Ordinary shares of ` 10 each 200 lakhs Reserves and Surplus 80 lakhs 10% Debentures each of face value ` 100 120 lakhs Total 400 lakhs A new project costing ` 100 lakhs when executed will raise the earnings before interest and taxes from current level of ` 80 lakhs to ` 110 lakhs. The following options are under consideration :

(i) Issues equality shares at a premium of ` 15 each for the entire amount. [ 5 ] MMPF–002

(ii) Issue 12% debentures for ` 100 lakhs.

(iii) Issue equity shares for ` 50 lakhs at a premium of ` 20 per share and issue 12% debentures for the balance amount. The company’s tax rate is 40%. Evaluate the three options and advise the company.