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Financial Management MCQ Questions and Solutions with Explanations | Commerce

Financial Management 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. Financial Management 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-10 section-9

Each section contains 100 MCQs on Financial Management .
91
Value of future dividends after horizon date is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Value of future dividends after horizon date is classified as horizon value and terminal value.
92
Pre-emptive right of common stockholders are necessarily included in company
Discuss
Answer & Solution
Answer: Option C
Solution:
Pre-emptive right of common stockholders are necessarily included in company corporate charter. A corporate charter sets forth a corporation's basic information, its location, profit/ nonprofit status, board composition, and ownership structure.
93
Constant growth rate is 8% and an expected dividend yield is 5.4% then expected rate of return would be
Discuss
Answer & Solution
Answer: Option C
Solution:
Expected rate of return = Constant growth rate + Expected dividend yield
= 8% + 5.4% = 13.40%.
94
Real rate of return, risk and expected inflation are primary determinants of
Discuss
Answer & Solution
Answer: Option A
Solution:
Real rate of return, risk and expected inflation are primary determinants of minimum rate of return. The required rate of return is the minimum return an investor expects to achieve by investing in a project. An investor typically sets the required rate of return by adding a risk premium to the interest percentage that could be gained by investing excess funds in a risk-free investment.
95
Preferred stocks are also classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Preferred stocks are also classified as perpetuities. Perpetuity refers to an infinite amount of time. In finance, perpetuity is a constant stream of identical cash flows with no end.
96
After-the-fact rate of return often consider as realized or actual can be denoted
Discuss
Answer & Solution
Answer: Option B
Solution:
After-the-fact rate of return often consider as realized or actual can be denoted r bar s.
97
In expected rate of return for constant growth, dividends are expected to grow but with the
Discuss
Answer & Solution
Answer: Option A
Solution:
In expected rate of return for constant growth, dividends are expected to grow but with the constant rate. The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR).
98
Expected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Investment = Final price - Capital gain
= 50 - 20
= 30
99
Preferred dividend is Rs 60 and required rate of return is 20% then value of preferred stock will be
Discuss
Answer & Solution
Answer: Option D
Solution:
Value of preferred stock = Dividend/required rate of return x 100
= 60/20 x 100 = 300
100
An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as entity multiple. Enterprise multiple, also known as the EV multiple, is a ratio used to determine the value of a company. The enterprise multiple looks at a firm in the way that a potential acquirer would by considering the company's debt.