Business Finance MCQ Questions and Solutions with Explanations | Commerce

A. Effective dividend policy is an important tool to achievethe goal of wealth maximization

B. According to Walter, the optimal payout ratio for a growth firm is 100%

C. The MM Model asserts that the value of the firm is not affected whether the firm pays dividend or not

D. The 'bird-in-the-hand theory' in reference to dividend decision has been developed by Myron Gordon

A. Derivatives are treated as on balance sheet items

B. Granularity of securitised assets can mitigate the credit risk

C. Credit enhancement' means credit quality is increased above from the originator's underlying asset pool

D. Securitisation makes it possible to transfer risks from an entity that does not want to bear it, to one that does

A. It aggravates the market trends

B. It causes violent fluctuations in exchange rate

C. Both A and B

D. Neither A nor B

A. three months

B. one year

C. three years

D. five years

A. one year

B. five years

C. more than five years

D. None of these

A. Present value

B. Simple interest

C. Future value

D. Compound interest

A. overseas loan funds

B. remittances from NRIs

C. foreign equity capital

D. foreign direct investment

A. discounted cash flow

B. net present value of future cash flow

C. net present value of present cash outflow

D. risk factor cash flow

A. MM Hypothesis

B. Net Income Approach

C. The Traditional View

D. None of the above

A. Finance lease

B. Operating lease

C. Mixed lease

D. All of the above