CA Inter Financial Management Important Questions for January 2027 Exam

Preparing for CA Inter Financial Management can be challenging when you have to understand multiple formulas, remember calculation steps and apply the right method to numerical problems. Topics such as Cost of Capital require conceptual clarity as well as regular practice to solve questions accurately.

To help you prepare, PW offers live and recorded classes, detailed study material, practice questions and doubt-solving sessions. These resources allow you to learn financial concepts, revise important formulas, practise numerical questions and clarify doubts while preparing for the January 2027 examination.

CA Inter FM Important Questions for January 2027 Exam

The following CA Inter FM Practice Questions are based on the available study material for the Cost of Capital chapter. They cover convertible debentures, the approximation method, the internal rate of return method and bond valuation.

Question – 1: TT Ltd. issued 20,000, 10% convertible debentures of `100 each with a maturity period of 5 years. At maturity, the debenture holders will have the option to convert debentures into equity shares of the company in the ratio of 1:5 (5 shares for each debenture). The current market price of the equity share is  `20 each, and historically the growth rate of the share is 4% per annum. Assuming the tax rate is 25%.  Compute the cost of 10% convertible debenture using the Approximation Method and Internal Rate of  Return Method. 

PV factors are as under: 

Solution 

Value of equity shares after 5 years = 20 × (1 + 0.04)5 = `24.33 

Redemption value of debenture will be higher of: 

a) Cash value of debenture = `100 

b) Value of equity shares = 5 × 24.33 = `121.65 

∴Higher redemption value of the above two = `121.65 

Approximation Method: 

Internal Rate of Return Method: 

Cost of Debentures (Kd) =

Question – 2: SK Ltd. issued 12% Bonds of face value `2,000 each, which are redeemable after 5 years. Tax rate is  30%, and the bonds are amortised equally over the life of the bonds. Compute the value of the bond if the investor expects a minimum return of 8% from the bonds. 

Solution 

Value of the bond = ₹2020.26 

CA Inter FM Important Questions PDF Download by PW

The CA Inter FM Question Bank PDF covers the Cost of Capital chapter, including the cost of debt, cost of redeemable debt, YTM method, convertible debentures and bond valuation. It includes formula-based concepts, practical questions and worked solutions to help you understand the calculation process.

Use the PDF to practise Financial Management Chapter Wise Questions and revise the formulas and methods used in each problem. Working through the solutions can also help you understand how to organise calculations and reach the correct answer.

How to Prepare for CA Inter Financial Management?

Preparing for Financial Management requires a balance of conceptual understanding, formula revision and regular numerical practice. A planned approach based on the CA Intermediate FM syllabus and exam pattern can help you prioritise chapters, practise different question types and improve your accuracy before the January 2027 examination.

1. Understand the CA Intermediate FM Syllabus: Review the complete syllabus and identify the chapters, concepts and formulas you need to cover before the January 2027 examination.

2. Check the CA Inter Exam Pattern: Review the latest examination pattern, question types and marking scheme to understand how to plan your revision and practice.

3. Revise Important Formulas: Maintain a formula sheet for topics such as Cost of Capital and revise the assumptions and steps involved in each method.

4. Practise Chapter-Wise Questions: Solve Financial Management Chapter Wise Questions to build familiarity with different numerical problems and their applications.

5. Attempt Questions Independently: Work through CA Inter FM Practice Questions before checking the solutions. Focus on selecting the right formula, showing calculations clearly and interpreting the result.

6. Review Your Mistakes: Identify calculation errors and concepts that need more revision. Revisit these topics and practise similar questions from the CA Inter FM Question Bank.

Preparing for CA Inter Financial Management requires a clear understanding of formulas and regular practice with numerical questions. Revising topics such as Cost of Capital and solving questions on different valuation methods can help improve your accuracy and problem-solving approach. PW supports your CA preparation with live and recorded classes, study material, practice questions and doubt-solving sessions, helping you revise concepts and work on areas that need more attention.