Financial Management MCQ Questions and Solutions with Explanations | Commerce

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61.
Depreciation is incorporated in cash flows because it:

A. is unavoidable cost

B. is a cash flow

C. reduces tax liability

D. involves an outflow

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62.
Constant Dividend Per Share' Policy is considered as:

A. Increasing Dividend Policy

B. Decreasing Dividend Policy

C. Stable Dividend Policy

D. None of the above

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63.
Relationship between change in Sales and the Operating Profit is known as:

A. Financial Leverage

B. Operating Leverage

C. Net Profit Ratio

D. Gross Profit Ratio

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64.
Dividend irrelevance argument of MM Model is based on:

A. Issue of Debentures

B. Issue of Bonus Share

C. Arbitrage

D. Hedging

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65.
Every company should follow:

A. High Dividend Payment

B. Low Dividend Payment

C. Stable Dividend Payment

D. Fixed Dividend Payment

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66.
Financial Planning deals with:

A. Preparation of Financial Statements

B. Planning for a Capital Issue

C. Preparing Budgets

D. All of the above

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67.
Stock split is a form of:

A. Dividend payment

B. Bonus issue

C. Financial restructuring

D. Dividend in kind

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68.
If the Real rate of return is 10% and Inflation rate is 40%, then Money Discount Rate is:

A. 14.4%

B. 2.5%

C. 25%

D. 14%

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69.
Cost of capital may be defined as:

A. Weighted Average cost of all debts

B. Rate of Return expected by Equity Shareholders

C. Average IRR of the Projects of the firm

D. Minimum Rate of Return that the firm should earn

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70.
For a constant EBIT, if the debt level is further increased then:

A. EPS will always increase

B. EPS may increase

C. EPS will never increase

D. None of the above

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Financial Management MCQ Questions and Solutions with Explanations | Commerce

61. Depreciation is incorporated in cash flows because it:

Answer & Solution

62. Constant Dividend Per Share' Policy is considered as:

Answer & Solution

63. Relationship between change in Sales and the Operating Profit is known as:

Answer & Solution

64. Dividend irrelevance argument of MM Model is based on:

Answer & Solution

65. Every company should follow:

Answer & Solution

66. Financial Planning deals with:

Answer & Solution

67. Stock split is a form of:

Answer & Solution

68. If the Real rate of return is 10% and Inflation rate is 40%, then Money Discount Rate is:

Answer & Solution

69. Cost of capital may be defined as:

Answer & Solution

70. For a constant EBIT, if the debt level is further increased then:

Answer & Solution

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61.
Depreciation is incorporated in cash flows because it:

62.
Constant Dividend Per Share' Policy is considered as:

63.
Relationship between change in Sales and the Operating Profit is known as:

64.
Dividend irrelevance argument of MM Model is based on:

65.
Every company should follow:

66.
Financial Planning deals with:

67.
Stock split is a form of:

68.
If the Real rate of return is 10% and Inflation rate is 40%, then Money Discount Rate is:

69.
Cost of capital may be defined as:

70.
For a constant EBIT, if the debt level is further increased then: