Strategic Financial Management Set 6
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This set of Strategic Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Strategic Financial Management Set 6
Q1 | The ideal situation is to have high financial leverage and low operating leverage.
- False
- True
- none
- all
Q2 | Composite leverage explains change in taxable income on account of change in sales
- True
- False
- none
- all
Q3 | Dividend on preference share capital is ignored while calculating operating leverage.
- True
- False
- none
- all
Q4 | Trading on equity implies having a ------ debt-equity ratio.
- Low
- Medium
- High
- Normal
Q5 | ………. on capital is called cost of capital.
- Minimum expected return
- Normally expected return
- Higher expected return
- None of these
Q6 | Which among the following method is based on time value of money?
- Pay-back period
- Post pay-back profitability
- Discounted cash flow method
- ARR method
Q7 | Under net present value criteria, a project is approved if ……
- NPV is positive
- The funds are unlimited
- Both A & B
- None of these
Q8 | The return available from the project after the pay-back period is not considered in the case of ……
- Net present value
- Profitability index
- Internal rate of return
- Pay-back period method
Q9 | Internal rate of return and net present value are synonymous terms.
- True
- False
- none
- all
Q10 | Ind AS deals with Lease finance is ____
- Ind AS 17
- Ind AS 117
- Ind AS 102
- Ind AS 115
Q11 | ……..is a long term lease and the lessee will be paying much more than the cost of the property orequipment to the lessor in the form of lease charges.
- Operating lease
- Financial lease
- Leveraged lease
- Direct lease
Q12 | ………is also known as dividend capitalisation model
- Walter’s model
- Gordon’s model
- Modiglani & Millers model
- None of these
Q13 | SVA stands for….
- Share value accounted
- Statutory value addition
- Shareholder value added
- None of the above
Q14 | Financial risk arises when there is an involvement of ……in the capital structure
- Debt
- Equity
- Right issue
- Bonus issue
Q15 | The concept of EVA has been developed by …….
- Alfred marshal
- Benjamin Fleming
- Stern Steward
- Charles H Dow
Q16 | Use of more debt capital rather than equity capital is called……
- Risk taking
- Operating leverage
- Combined leverage
- Financial leverage
Q17 | The policy on quantum of dividend to be distributed as dividend is termed as ……
- Profit sharing policy
- Appropriation
- Dividend policy
- Distribution policy
Q18 | Operating leverage is not favourable when ………
- Fixed costs are more than contribution
- Fixed cost is less than variable cost
- Fixed cost and variable cost are equal
- None of the above cases
Q19 | Stock dividend and bonus shares are synonymous terms.
- True
- False
- none
- all