Financial Management MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13

81.
Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers?

A. Demat account

B. Securities Exchange Commission

C. Depository Trust Company

D. Federal Depository Insurance Corporation.

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82.
The expansion of EAR is?

A. equivalent annual rate

B. equivalent annuity rate

C. equally applied rate

D. equal advance rate

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83.
The formula for cost of debt is __________.

A. I x ( 1 - t)

B. I+p

C. I-P

D. Ixp

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84.
Total return is equal to________.

A. capital gain and yield

B. yield and interest

C. capital gain

D. yield

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85.
Traditional theorists believe that.

A. there exists an optimal capital structure

B. no optimal capital structure

C. equal optimal capital structure

D. 100% debt financial organizations

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86.
Which of the following is / are assumption(s) underlying the Miller and Modigliani analysis?

A. Capital markets are perfect

B. Investors are assumed to be rational and behave accordingly

C. There is no corporate or personal income tax

D. All of the above.

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87.
The return component that gives periodic cash flows to the investor is known as the______________.

A. capital gain

B. interest rate

C. yield

D. unrealized gain.

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88.
The dividend-payout ratio is equal to __________.

A. the dividend yield plus the capital gains yield

B. dividends per share divided by earnings per share

C. dividends per share divided by par value per share

D. dividends per share divided by current price per share.

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89.
Altering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.

A. net income approach

B. traditional approach

C. modern approach

D. net operating income approach

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90.
While calculating the weighted average cost of capital, market value weights are preferred because ____________.

A. Book value weights are historical in nature

B. This is in conformity with the definition of cost of capital as the investors minimum required rate of return

C. Book value weights fluctuate violently

D. Market value weights are fairly consistent over a period of time.

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Financial Management MCQ Questions and Solutions with Explanations | Commerce

81. Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers?

Answer & Solution

82. The expansion of EAR is?

Answer & Solution

83. The formula for cost of debt is __________.

Answer & Solution

84. Total return is equal to________.

Answer & Solution

85. Traditional theorists believe that.

Answer & Solution

86. Which of the following is / are assumption(s) underlying the Miller and Modigliani analysis?

Answer & Solution

87. The return component that gives periodic cash flows to the investor is known as the______________.

Answer & Solution

88. The dividend-payout ratio is equal to __________.

Answer & Solution

89. Altering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.

Answer & Solution

90. While calculating the weighted average cost of capital, market value weights are preferred because ____________.

Answer & Solution

Read More Section(Financial Management)

81.
Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers?

82.
The expansion of EAR is?

83.
The formula for cost of debt is __________.

84.
Total return is equal to________.

85.
Traditional theorists believe that.

86.
Which of the following is / are assumption(s) underlying the Miller and Modigliani analysis?

87.
The return component that gives periodic cash flows to the investor is known as the______________.

88.
The dividend-payout ratio is equal to __________.

89.
Altering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.

90.
While calculating the weighted average cost of capital, market value weights are preferred because ____________.