Financial Management Set 26
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 26
Q1 | LIBOR is a term of -------------
- Capital market
- Accounting
- Common market
- International Financial Market
Q2 | Foreign bonds are -------------------
- Domestic currency bonds
- Foreign currency bonds
- Product loan
- Currency
Q3 | Foreign bonds, are foreign currency bonds and sold at the country of that currency and are subject to the restrictions as placed by that country on the -------------------
- Foreigner’s fund
- Domestic holder’s fund
- Firm’s fund
- All of these
Q4 | Euro bond is a ------------
- Debt instrument
- Foreign currency bond
- Paper
- Bill
Q5 | Eurobonds are debt instruments denominated in a currency issued -----
- Outside the country
- In the country
- In the firm
- Outside the firm
Q6 | Bills discounting is a -----------------------
- Product of company
- Accounting paper
- Short term source of finance
- Capital
Q7 | The cost of capital is the rate of return of a company must earn on investment to maintain ----------------
- The value of the company
- The value of the product
- Price
- Product quality
Q8 | The cost of capital is --------------
- The maximum rate of return
- The minimum rate of return
- A profit
- A product
Q9 | The debt capital can be raised from issue of -----
- Bonds
- Equity share capital
- Right share
- Preference share capital
Q10 | The cost of debt capital is the ratio of interest payable on ---------
- Debenture
- Equity share capital
- Preference share capital
- Retained earning
Q11 | Dividends are the ---------- of a company distributed amongst members in proportion to their shares
- Divisible profits
- Indivisible profits
- Reserves
- Assets with cash and bank
Q12 | A sound dividend policy contains the ------------- features
- Stability
- Distribution of dividend in cash
- Gradually rising dividend ratio
- All of these
Q13 | This item can be treated as an item of current liability or as an item of appropriation
- Dividend
- Debentures
- Reserve
- Debtors
Q14 | Shareholder wealth" in a firm is represented by:
- the number of people employed in the firm.
- the book value of the firm's assets less the book value of its liabilities
- the amount of salary paid to its employees.
- the market price per share of the firm's common stock.
Q15 | The long-run objective of financial management is to:
- maximize earnings per share.
- maximize the value of the firm's common stock.
- maximize return on investment.
- maximize market share.
Q16 | What are the earnings per share (EPS) for a company that earned Rs. 100,000 last year in after-tax profits, has 200,000 common shares outstanding and Rs. 1.2 million in retained earning at the year end?
- Rs. 100,000
- Rs. 6.00
- Rs. 0.50
- Rs. 6.50
Q17 | A(n) would be an example of a principal, while a(n) would be an example of an agent.
- shareholder; manager
- manager; owner
- accountant; bondholder
- shareholder; bondholder
Q18 | The market price of a share of common stock is determined by:
- the board of directors of the firm.
- the stock exchange on which the stock is listed.
- the president of the company.
- individuals buying and selling the stock.
Q19 | The focal point of financial management in a firm is:
- the number and types of products or services provided by the firm.
- the minimization of the amount of taxes paid by the firm.
- the creation of value for shareholders.
- the dollars profits earned by the firm.
Q20 | ___________________ of a firm refers to the composition of its long-term funds and its capital structure.
- Capitalisation
- Over-capitalisation
- Under-capitalisation
- Market capitalization
Q21 | In the _______________, the future value of all cash inflow at the end of time horizon ata particular rate of interest is calculated.
- Risk-free rate
- Compounding technique
- Discounting technique
- Risk Premium
Q22 | ______________ is the price at which the bond is traded in the stock exchange.
- Redemption value
- Face value
- Market value
- Maturity value
Q23 | _____________ enhance the market value of shares and therefore equity capital is notfree of cost.
- Face value
- Dividends
- Redemption value
- Book value
Q24 | In _______________ approach, the capital structure decision is relevant to the valuation of the firm.
- Net income
- Net operating income
- Traditional
- Miller and Modigliani
Q25 | When __________ is greater than zero the project should be accepted.
- Internal rate of return
- Profitability index
- Net present value
- Modified internal rate of return