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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-9 section-9

Each section contains 100 MCQs on Financial Management .
81
Paid dividend is Rs 20 and dividend yield is 40% then current price would be
Discuss
Answer & Solution
Answer: Option C
Solution:
Current price = Paid dividend / Dividend yield percentage
= Rs. 20 / 40% = Rs. 50.00
82
Preferred stock dividends must be paid on common stock and must have
Discuss
Answer & Solution
Answer: Option A
Solution:
Preferred stock dividends must be paid on common stock and must have fixed amount of dividends. Preferred dividends are the dividends that are accrued paid on a company's preferred stock. Any time a company pays dividends, preferred shareholders have priority over common shareholders, which means dividends must always be paid to preferred shareholders before they are paid to common shareholders.
83
Constant growth model would not be used in condition if growth rate is
Discuss
Answer & Solution
Answer: Option D
Solution:
Constant growth model would not be used in condition if growth rate is greater than realized rate of return. A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.
84
Cash flow which is available for all investors of company is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Cash flow which is available for all investors of company is classified as free cash flow. Free cash flow represents the cash a company generates after cash outflows to support operations and maintain its capital assets.
85
Present value of dividends which is expected to be provided in future is classified as an
Discuss
Answer & Solution
Answer: Option A
Solution:
Present value of dividends which is expected to be provided in future is classified as an intrinsic value of stock. The intrinsic value of a stock, on the other hand, attempts to boil out the externals and value a company on its own merits. Internal factors like a firm's products, its management, and the strength of its brands in the marketplace determine intrinsic value. Investors are interested in cash available to stockholders.
86
Stock in large companies and own by people who are not active in management is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Stock in large companies and own by people who are not active in management is classified as publicly held stock. A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over-the-counter markets.
87
Information which is reflected in current market prices with help of past price movements is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Information which is reflected in current market prices with help of past price movements is classified as weak form efficiency. Weak form efficiency states that past prices, historical values and trends can't predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.
88
Capital gain is Rs 3 and capital gains yield is 6% then beginning price will be
Discuss
Answer & Solution
Answer: Option C
Solution:
Beginning price = Capital gain / Capital gains yeild percentage
= Rs. 3 / 6% = Rs. 50.00
89
Growth rate which is predicted by marginal investors for dividends is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Growth rate which is predicted by marginal investors for dividends is classified as expected growth rate. Growth rates refer to the percentage change of a specific variable within a specific time period and given a certain context.
90
An expected final stock price is Rs 70 and an expected capital gain is Rs 25 then an original investment would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Original investment = Expected final stock price - Expected capital gain
= Rs. 70 - Rs. 25 = Rs. 45.00