Working Capital Management Set 3
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This set of Working Capital Management Multiple Choice Questions & Answers (MCQs) focuses on Working Capital Management Set 3
Q1 | If ke = r, then under Walter's Model, which of the following is irrelevant?
- earnings per share,
- dividend per share,
- dp ratio
- none of the above
Q2 | MM Model argues that dividend is irrelevant as
- the value of the firm depends upon earning power
- the investors buy shares for capital gain,
- dividend is payable after deciding the retained earnings,
- dividend is a small amount
Q3 | Which of the following represents passive dividend policy ?
- that dividend is paid as a % of eps,
- that dividend is paid as a constant amount,
- that dividend is paid after retaining profits for reinvestment,
- all of the above
Q4 | In case of Gordon's Model, the MP for zero payout is zero. It means that
- shares are not traded,
- shares available free of cost,
- investors are not ready to offer any price,
- none of the above
Q5 | Gordon's Model of dividend relevance is same as
- no-growth model of equity valuation,
- constant growth model of equity valuation,
- price-earning ratio
- inverse of price earnings ratio
Q6 | If 'r' = 'ke', than MP by Walter's Model and Gordon's Model for different payoutratios would be
- unequal,
- zero,
- equal,
- negative
Q7 | Dividend Payout Ratio is
- pat÷ capital,
- dps ÷ eps,
- pref. dividend ÷ pat,
- pref. dividend ÷ equity dividend
Q8 | Dividend declared by a company must be paid in
- 20 days,
- 30 days
- 32 days,
- 42 days
Q9 | Dividend Distribution Tax is payable by
- shareholders to government
- shareholders to company,
- company to government,
- holding to subsidiary company
Q10 | Shares of face value of 10 are 80% paid up. The company declares adividend of 50%. Amount of dividend per share is
- . 5,
- .4
- . 80,
- . 50
Q11 | Which of the following generally not result in increase in total dividend liability?
- share-split,
- right issue,
- bonus issue
- all of the above
Q12 | Dividends are paid out of
- accumulated profits
- gross profit,
- profit after tax,
- general reserve
Q13 | In India, Dividend Distribution tax is paid on
- equity share
- preference share
- debenture,
- both (a) and (b)
Q14 | Every company should follow
- high dividend payment
- low dividend payment,
- stable dividend payment
- fixed dividend payment
Q15 | 'Constant Dividend Per Share' Policy is considered as:
- increasing dividend policy
- decreasing dividend policy,
- stable dividend policy
- none of the above
Q16 | Which of the following is not a type of dividend payment?
- bonus issue,
- right issue,
- share split,
- both (b) and (c)
Q17 | If the following is an element of dividend policy?
- production capacity,
- change in management,
- informational content,
- debt service capacity
Q18 | Stock split is a form of
- dividend payment,
- bonus issue,
- financial restructuring,
- dividend in kind
Q19 | In stock dividend:
- authorized capital always increases,
- paid up capital always increases,
- face value per share decreases
- market price for share decreases
Q20 | Which of the following is not considered in Lintner's Model ?
- dividend payout ratio,
- current eps,
- speed of adjustment,
- preceding year eps
Q21 | Which of the following is not relevant for dividend payment for a year ?
- cash flow position
- profit position,
- paid up capital,
- retained earnings
Q22 | Cash Budget does not include
- dividend payable
- postal expenditure,
- issue of capital,
- total sales figure
Q23 | Which of the following is not a motive to hold cash?
- transactionary motive,
- pre-scautionary motive,
- captal investment,
- none of the above.
Q24 | Cheques deposited in bank may not be available for immediate use due to
- payment float
- recceipt float
- net float,
- playing the float.
Q25 | Difference between between the bank balance as per Cash Book and Pass Bookmay be due to:
- overdraft,
- float,
- factoring,
- none of the above.