Financial Management MCQ Questions and Solutions with Explanations

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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-3 section-12

Each section contains 100 MCQs on Financial Management .

'That personal leverage can replace corporate leverage' is assumed by:

A) Traditional Approach B) MM Model C) Net Income Approach D) Net Operating Income Approach

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Which of the following cost of capital require tax adjustment?

A) Cost of Equity Shares B) Cost of Preference Shares C) Cost of Debentures D) Cost of Retained Earnings

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Which of the following argues that the value of levered firm is higher than that of the unlevered firm?

A) Net Income Approach B) Net Operating Income Approach C) MM Model with Taxes D) Both A and C

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

MM Model argues that dividend is irrelevant as:

A) the value of the firm depends upon earning power B) the investors buy shares for capital gain C) dividend is payable after deciding the retained earnings D) dividend is a small amount

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

If a company issues new share capital to redeem debentures, then:

A) OL will increase B) FL will increase C) OL will decrease D) FL will decrease

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

The type of collateral (security) used for short-term loan is:

A) Real estate B) Plant & Machinery C) Stock of good D) Equity share capital

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Real rate of return is equal to:

A) Nominal Rate × Inflation Rate B) Nominal Rate ÷ Inflation Rate C) Nominal Rate - Inflation Rate D) Nominal Rate + Inflation Rate

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Cost Capital for Equity Share Capital does not imply that:

A) Market Price is equal to Book Value of share B) Shareholders are ready to subscribe to right issue C) Market Price is more than Issue Price D) AC of the three above

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Which of the following is not considered in Lintner's Model?

A) Dividend Payout Ratio B) Current EPS C) Speed of Adjustment D) Preceding year EPS

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

If the intrinsic value of a share is less than the market price, which of the most reasonable?

A) That shares have lesser degree of risk B) That market is over valuing the shares C) That the company is high dividend paying D) That market is undervaluing the share

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

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Financial Management MCQ Questions and Solutions with Explanations | Commerce