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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-6 section-3

Each section contains 100 MCQs on Financial Management .
51
One reason for the declining importance of pension funds is the_______________.
Discuss
Answer & Solution
Answer: Option B
Solution:
One reason for the declining importance of pension funds is the downsizing of US companies.
52
Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?
Discuss
Answer & Solution
Answer: Option A
Solution:
Net income approach of the following approaches cost of equity capital is assumed to be constant with the change in leverage. Net Income Approach suggests that value of the firm can be increased by decreasing the overall cost of capital (WACC) through higher debt proportion.
53
Most financial advisors are registered with the Securities and Exchange Commission as_______________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Most financial advisors are registered with the Securities and Exchange Commission as registered financial planners. A financial planner is a qualified investment professional who helps individuals and corporations meet their long-term financial objectives.
54
Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies?
Discuss
Answer & Solution
Answer: Option A
Solution:
Net Income Approach advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies. Net Income Approach suggests that value of the firm can be increased by decreasing the overall cost of capital (WACC) through higher debt proportion.
55
Underlying all investments is the trade-off between_________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Underlying all investments is the trade-off between expected return and risk. Risk simply means that the future actual return may vary from the expected return.
56
While calculating weighted average cost of capital _________.
Discuss
Answer & Solution
Answer: Option B
Solution:
While calculating weighted average cost of capital cost of issue is considered. Weighted average cost of capital ( WACC) is the average after-tax cost of a company's various capital sources used to finance the company.
57
Mumbai stock exchange was recognized on a permanent basis in___________.
Discuss
Answer & Solution
Answer: Option C
Solution:
On August 31, 1957, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act.
58
Over the Counter Exchange of India was started after the role model of_________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Over the counter exchange of India was started in 1992 after the role models of NASDAQ(national association of securities dealers automated quotation) and JASDAQ.
59
Which, among the following, are common misconceptions about cost of capital?
Discuss
Answer & Solution
Answer: Option D
Solution:
Depreciation-generated funds have no cost, Cost of capital is low if a project is heavily debt-financed and Cost of equity is equal to the dividend rate are common misconceptions about cost of capital.
60
The Accounting period cycle of NSE is___________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The Accounting period cycle of NSE is Wednesday to next Tuesday.