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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 23

Q1 | Which ratio explains that how much portion of earning is distributed in the form of dividend
  • Dividend per Share Ratio
  • Pay Out Ratio
  • Earning yield Ratio
  • Equity Capital Ratio
Q2 | Preference shares are those shares whose holders have -------------
  • Certain common rights
  • Certain preferential Rights
  • Return on capital ownership on shares
  • Return on capital
Q3 | When preference shareholders have a right to convert their preference shares in to equity shares after a pre-decided dare such shares are called -------- shares.
  • Participating
  • Convertible
  • Redeemable
  • Irredeemable
Q4 | Which is the element of cumulative convertible preference shares?
  • The rate of dividend will be 10%
  • The rate of dividend is 20%
  • No risk
  • No return
Q5 | ----------- have veto power to protect their preferential rights
  • Preference shareholder
  • Debenture holders
  • Common preference share
  • Right shares
Q6 | The company can reduce its capital by -------------
  • Convertible share
  • Payment of loan
  • Redemption of redeemable preference shares
  • Payment of interest
Q7 | Which is the type of dividend?
  • Cash dividend
  • Interest
  • Profit cum reserve
  • Flexible capital
Q8 | The dividend on equity shares is only paid when dividend on ---------- has already been paid
  • Equity shares
  • Preference shares
  • Bond
  • Debenture
Q9 | Which shares are not redeemed during lifetime of the company?
  • Equity shares
  • Preference shares
  • Redeemable pre-shares
  • All of these
Q10 | “ A debenture is a document which either creates a debt or acknowledge it” . who said?
  • Justice Chitty
  • Tophan’s Company law
  • J. Betty
  • Hoston D
Q11 | Which is the current liability?
  • Bills payable
  • Bank overdraft
  • Creditors and proposed dividend
  • All of these
Q12 | Reserve is an ---------------
  • Additional part of profit
  • Additional loss
  • Liability
  • Cost
Q13 | If there is over capitalization in the company, the redemption of debenture can lead to---------------
  • Cost of capital
  • Balanced capital structure
  • Equity
  • Dividend
Q14 | The interest on debenture may be ---------------
  • Fixed liability
  • Flexible liability
  • More cost
  • Less cost
Q15 | The issue of debenture is done only by the --------------
  • New company
  • New firm
  • New partnership
  • Established and reputed companies
Q16 | The debentures are used only by those companies whose ------------
  • Goodwill is more
  • Goodwill is less
  • Worth is less
  • All of these
Q17 | The debentures are issued on the security of ----------------
  • Fixed assets
  • Fixed capital
  • Current Assets
  • Current liabilities
Q18 | Every debenture holders is a ----------------
  • Owner of the company
  • Creditor of the company
  • Supplier of the company
  • Customer of the company
Q19 | A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is
  • Maximum
  • Minimum
  • Expensive
  • All of the above
Q20 | Term loans are those loans which are payable after one or more ______________
  • years
  • Time
  • Costly
  • All of these
Q21 | The redemption means
  • The payment of amount
  • The depreciation of the amount
  • The allocation of cost
  • All of these
Q22 | Refunding means
  • Issue of new debenture
  • Issue of capital
  • Disposable cost
  • Issue new debentures in place of old debentures
Q23 | Conversion means
  • Debentures are converted in to equity shares
  • Registration of cost
  • Accounting the transaction
  • Debenture holders are allotted equity shares
Q24 | Stock is --------------------
  • Current asset
  • Fixed asset
  • Fixed capital
  • All of these
Q25 | Earnings means -----------------------
  • Profit
  • Loss
  • Capital
  • Reserve