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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-7 section-9

Each section contains 100 MCQs on Financial Management .
61
Dividend will grow at non-constant rate for N periods and periods such as N is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Dividend will grow at non-constant rate for N periods and periods such as N is classified as terminal date and horizon date.
62
Beginning price is Rs 25 and capital gains yield is 5% then capital gain would be
Discuss
Answer & Solution
Answer: Option B
Solution:
Capital gain = Beginning price * Capital gains yeild
= 25 * 5% = Rs. 1.25
63
If an expected final stock price is Rs 85 and an original investment is Rs 70 then value of expected capital gain would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Value of expected gain = Expected final stock price - Original investment
= Rs. 85 - Rs. 70 = Rs. 15.00
64
Third step in calculating value of stock with non-constant growth rate is to find
Discuss
Answer & Solution
Answer: Option A
Solution:
Third step in calculating value of stock with non-constant growth rate is to find PV of expected dividends. The first component of value is the present value of the expected dividends during the high growth period.
65
In expected rate of return for constant growth, expected total rate of return is equal to
Discuss
Answer & Solution
Answer: Option B
Solution:
In expected rate of return for constant growth, expected total rate of return is equal to dividend yield. The dividend yield is the ratio of a company's annual dividend compared to its share price.
66
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as strong form efficiency. Strong-form efficiency is a component of the random walk theory and states that market and securities prices are not random and are influenced by past events. Strong-form efficiency is the opposite of weak form efficiency.
67
An expected dividend yield is added into expected growth rate to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
An expected dividend yield is added into expected growth rate to calculate expected rate of return. The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR).
68
Dividend yield is 25% and current price is Rs 40 then dividend yield will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Dividend yield = Current price * Dividend yield percentage
= Rs. 40 * 25% = Rs. 10.00
69
Paid dividend with dividend yield 25% is Rs 5 then cost price would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Cost price = Dividend paid / Dividend yield percentage
= Rs. 5 / 25% = Rs. 20.00
70
An expected final stock price is Rs 45 and an original investment is Rs 25 then an expected capital gain will be
Discuss
Answer & Solution
Answer: Option D
Solution:
Expected capital gain = Expected final stock price - Original investment
= Rs. 45 - Rs. 25 = Rs. 20.00