Financial Management Set 21
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 21
Q1 | In India ,preference shares must be redeemed within a period
- 3 year of issue
- 6 years of issue
- 10 years of issue
- 20 years of issue
Q2 | Dividend yield method the cost of equality is ascertained as a percentage of
- Expected dividend
- IRR
- WACC
- Expected profits
Q3 | In the case of existing shares cost of equity is computed under dividend yield method by dividing dividend per share with
- Face value
- Market value
- Net proceeds
- None of these
Q4 | The weighted average cost of new or additional capital is called
- Opportunity cost
- Composite cost
- Marginal cost
- Average cost
Q5 | The ratio between debt and equity in the total capitalization is called
- Capital gearing
- Capitalization
- Capital structure
- Financial structure
Q6 | Capital composition of a company including long term, medium term and short term finances
- Capital gearing
- Capitalization
- Capital structure
- Financial structure
Q7 | According NO1 theory, increase in EBIT will
- Increase the value of the firm
- Decrees the value of firm
- Not affect value
- Increase when debt is increased
Q8 | According NO1 theory ,value of firm is
- Related to its capital structure
- Not related to its capital structure
- Related to debt
- Related to overall cost of capital
Q9 | --------------- theory says that the value of a firm will be different stages of growth
- Net income
- NOI
- M M theory
- Traditional theory
Q10 | Redundant working capital means
- Optimum working capital
- Shortage of working capital
- Idle working capital
- None of these
Q11 | Floating capital means
- Liquid capital
- Permanent working capital
- Redundant working capital
- Gross working capital
Q12 | According to ------------- approach, cash inflow from assets should match with the cash outflow required to acquire them.
- Aggressive approach
- Hedging approach
- Conservative approach
- Optimization
Q13 | The appropriate objective of an enterprise is :
- Maximization of sales
- Maximization of owners wealth
- Maximization of profits
- None of these
Q14 | The job of finance manager is confined to:
- Raising of funds
- Management of cash
- Raising of funds and their effective utilization
- None of the above
Q15 | Financial decision involve
- Investment, financing and dividend decisions
- Investment, financing and sales decisions
- Financing, dividend and cash decisions
- None of the above
Q16 | The possibility that a company will have lower than anticipated profits is called ---------------------
- Financial risk
- Operational risk
- Business risk
- Technological risk
Q17 | -------------------- refers to the risk associated with the capital structure composition
- Financial risk
- Operational risk
- Business risk
- Technological risk
Q18 | When contribution is dividend with EBIT we get
- Operating leverage
- Financial leverage.
- P/V ratio
- EPS
Q19 | According to ------------------ the degree of leverage is irrelevant in determining the value of a firm
- MM theory
- Walter’s model
- Baumol’s model
- None of these
Q20 | --------------- leverage is obtained from the equation EBIT/EBT
- Operating leverage
- Financial leverage
- Combined leverage
- None of these
Q21 | Buying a security from low priced market and selling at high priced market is called -------------
- Speculation
- Arbitrage
- Gangbling
- Investment
Q22 | The traditional approach of capital structure was propounded by -------------------
- David Durand
- Solomon Ezra
- Modigilani-Mille
- None of these
Q23 | Net operating income(NOI) approach was propounded by ------------
- Solomon Ezra
- David Durand
- Modigilani-Miller
- None of these
Q24 | According to NOI theory, the value of the firm depends on -----------
- Financial risk
- Operational risk
- Technological risk
- Business risk
Q25 | --------------- theory is applicable only when the dividend pay out ratio is 100%
- MM theory
- NOI theory
- Net income approach
- None of these