Valuation of Shares

Bachelor of Business Administration (BBA),

Bachelor of Commerce (B Com)

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This set of Corporate Accounting Multiple Choice Questions & Answers (MCQs) focuses on Valuation of Shares

Q1 | F.M.P. stands for …………………
  • Firm maintainable profits
  • Future maintainable profits
  • False maintainable profits
  • Foreign maintainable profits.
Answer: Future maintainable profits
Q2 | P/E ratio is a relationship between……………….. and ……………
  • MP/ EPS
  • NP/EPS
  • GP/ EPS
  • LOSS/EPS
Answer: MP/ EPS
Q3 | Intrinsic Value Method is also called as………………..
  • Yield method
  • Fair value method
  • Asset Backing method
  • none
Answer: Asset Backing method
Q4 | Yield value is based on the assumption that ……………….
  • Revenue realisation
  • Going concern
  • Prudence
  • Cost concept
Answer: Going concern
Q5 | NRR stands for ……………………………….
  • Normal rate of return
  • Non resident
  • Natural rate of return
  • Nil rate of return
Answer: Normal rate of return
Q6 | Goodwill is paid for obtaining __________.
  • Future benefit
  • Present benefit
  • Past benefit
  • None of the above
Answer: Future benefit
Q7 | The company earns a net profit of 24,000 with a capital of1,20,000. The NRR is10%. Under capitalisation of super profit, goodwill will be ___________.
  • 1,20,000
  • 70,000
  • 12,000
  • 24,000
Answer: 1,20,000
Q8 | Gross assets are 1,01,000, fictitious assets 350 are included in the gross assets. External liabilities are 7,500. 6% preference share capital is 45,000. Equity capital is 4,500 equity shares of 10 each fully paid. Average expected profit is 8,500. Transfer to reserves is 10% preference dividend is payable. NRR is 9%. The Net Asset Value Per share is ___________.
  • 11
  • 10.70
  • 15
  • 20
Answer: 10.70
Q9 | Fair value is not the average of intrinsic value and yield value.
  • True
  • False
  • none
  • none
Answer: False
Q10 | In net Assets method all liabilities are consider.
  • True
  • False
  • none
  • none
Answer: False
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