CVS is renowned multiplex operator in India. It owns around 280 screens in 55 properties at 36
locations in the country. Considering the fact that there is more growing trend among the people
to spend more of there disposable income on entertainment, company planning to add more
screen at existing locations and start at new locations also.
Further they plan to add food chain also at their locations. The company planned to flow cquity
shares in market to raise the desired capital. The issue was fully subscribed and paid. Over the
years, the scale and the profit of the company have increased tremendously and it has been
declaring higher dividend and the market price of its share has increased manifolds.
13. Which financial decision is highlighted in the lines, "considering the fact that there is
more growing trend among the people to spend more of their disposable income on
entertainment, company planned to add more screen at existing locations and start at new
locations also"?
a) Investment decision
(c) dividend decision
b) Financing decision
(d) none of these
14. Identify the decision involved in the lines," the company planned to float equity shares in
the market to raise the desired capital. The issue was fully subscribed and paid."
15. The above case highlights the fulfillment of one of the prime objectives of financial management
by CVS company. Identify the objective:
a) profit maximization
b) increasing customer base
c) wealth maximization of shareholders
d) none of the above
16. "Over the years, the sale and the profit of the company have increased tremendously and it has
been declaring higher dividend and the market price of its share has increased manifolds". The
quoted lines highlight one of the factors affecting dividend decision. Identify the factor.
a) Taxation policy
c) stability of earnings
b) legal restrictions
d) none of these
Answers
Answer:
I don't understand your question sorry
13. investment decision
14.financing decision
15. Wealth maximisation of
shareholders
16. Stability of earnings.
Explanation:
13. Investment decision is correct because this decision involves how the funds of the firm are to be deployed or invested into different assets, so as to earn the highest possible return for the investors.
14. Financing decision is the correct answer because this decision is related to the raising up of the finance. It involves spotting various sources of finance and the amount of finance to be raised either from long-term sources or short term sources or from both(mixed sources).
15. Wealth maximisation of shareholders is the correct answer because in this case study, the focus is on long- term based return thus profit maximization is not an accurate answer, rather the objective of the firm is to maximize the value of the firm for its shareholders or owners, that is to maximize shareholder wealth.
16. Stability of earning is the correct answer because when a company has a smooth or stable earning, they are more likely in a position to declare a higher dividend in comparison to the company having unstable earnings.