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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-9

Each section contains 100 MCQs on Financial Management .
51
Dividend expected on stock during coming year is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Dividend expected on stock during coming year is classified as expected dividend yield. Dividend yield ratio is a measure of the productivity of your investment.
52
In expected rate of return for constant growth, capital gains is divided by beginning price to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
In expected rate of return for constant growth, capital gains is divided by beginning price to calculate yield of capital gains. A capital gains yield is the rise in the price of a security, such as common stock. For common stock holdings, the CGY is the rise in the stock price divided by the original price of the security.
53
Preferred dividend is divided for required rate of return to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
Preferred dividend is divided for required rate of return to calculate value of preferred stock. The value of a preferred stock equals the present value of its future dividend payments discounted at the required rate of return of the stock. In most cases the preferred stock is perpetual in nature, hence the price of a share of preferred stock equals the periodic dividend divided by the required rate of return.
54
Value of stock is Rs 400 and required rate of return is 20% then preferred dividend would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Preferred Dividend = Value of stock * Required rate of return
= 400 * 20% = Rs. 80.00
55
An amount of company retain earning, return on equity and inflation are factors which effect
Discuss
Answer & Solution
Answer: Option A
Solution:
An amount of company retain earning, return on equity and inflation are factors which effect earning growth. Earnings growth is the annual compound annual growth rate (CAGR) of earnings from investments.
56
Value of stock is Rs 300 and preferred dividend is Rs 60 then required rate of return would be
Discuss
Answer & Solution
Answer: Option B
Solution:
Required rate of return = Preferred dividend / Value of stock * 100
= 60 / 300 * 100 = 20%.
57
Tracking stock of company is also classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Tracking stock of company is also classified as target stock. Target Stock means any Target Preferred Stock and/or any Target Common Stock.
58
An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Constant growth rate = Expected rate of return - Expected dividend yield
= 11.5% - 5.5% = 6.00%
59
A right which controls and prevents transfer from current stockholders to other new stockholders is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
A right which controls and prevents transfer from current stockholders to other new stockholders is considered as corporate charter. A corporate charter, also known as a "charter" or "articles of incorporation," is a written document filed with the Secretary of State (or registrar in Canada) by the founders of a corporation.
60
In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate firm total value. The value of the firm is measured as the sum of the value of the firm's equity and the value of the debt.