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Business Finance MCQ Questions and Solutions with Explanations | Commerce

Business Finance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Business Finance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-7 section-2

Each section contains 100 MCQs on Business Finance .
61
Which of the following is not a feature of the payback period method?
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Answer & Solution
Answer: Option D
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62
"Dividend policy determines the division of earnings between payments to shareholders and retained earnings." Who said this?
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Answer & Solution
Answer: Option A
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63
Which of the following statements are correct regarding profit maximization as the primary goal of the firm?
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Answer & Solution
Answer: Option D
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64
The explicit costs (in case of cost of debt capital) are measured by the interest rate only adjusted by the
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Answer & Solution
Answer: Option A
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65
Who formulated the following model for estimating the market price of equity share?
$$P = \frac{{D + \frac{{{R_A}}}{{{R_C}}}\left( {E - D} \right)}}{{{R_C}}}$$
Where,
P = Market price of equity share
D = DPS
E = EPS
E - D = Retained earnings per share
RA = Internal rate of return on investment
RC = Cost of capital
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Answer & Solution
Answer: Option C
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66
The amount of current assets that varies with seasonal requirements is referred to as
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Answer & Solution
Answer: Option C
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67
If a firm raises Rs. 1,00,000 by the issue of debentures at 10%, repayable after 10 years, the rate of return that equates the present value of cash inflows with the present value of cash outflows is referred to as
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Answer & Solution
Answer: Option A
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68
The Dutch auction as a method appliesin India. Which method of stock repurchase occurs when the buyer seeksbids within a specified price range and accepts the lowest price that will allow it to acquire the entire block of securities desired?
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Answer & Solution
Answer: Option A
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69
If a company goes for a new issue of debentures, what is the impact of such development?
1. The volatility of the returns of equity in relation to a market index is likely to be affected.
2. The beta may rise.
3. The gearing ratio will rise.
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Answer & Solution
Answer: Option D
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70
In deciding the optimal level of current assets for the firm, a company has to confront with which of the following situation?
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Answer & Solution
Answer: Option A
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