Financial management

1. In capital budgeting, two projects who have cost of capital as 12% is classified as

hurdle rate
capital rate
return rate
budgeting rate

Detailed SolutionIn capital budgeting, two projects who have cost of capital as 12% is classified as

2. Which of the following is not considered in Lintner’s Model?

Dividend Payout Ratio
Current EPS
Speed of Adjustment
Preceding year EPS

Detailed SolutionWhich of the following is not considered in Lintner’s Model?

3. In Risk-adjusted Discount Rate method, the normal rate of discount is:

Increased
Decreased
Unchanged
None of the above

Detailed SolutionIn Risk-adjusted Discount Rate method, the normal rate of discount is:

4. Which of the following is not a source of long-term finance?

Equity shares
Preference shares
Commercial papers
Reserves and surplus

Detailed SolutionWhich of the following is not a source of long-term finance?

5. Which of the following is not a technique of receivables Management?

Funds Flow Analysis
Ageing Schedule
Days Sales Outstanding
Collection Matrix

Detailed SolutionWhich of the following is not a technique of receivables Management?

6. An efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as

market efficiency
semi strong efficiency
weak form efficiency
strong form efficiency

Detailed SolutionAn efficient market hypothesis states in which all public or private information is reflected in current market prices is classified as

7. Gross domestic product, world economy strength and level of inflation are factors which is used to determine

market realized return
portfolio realized return
portfolio arbitrage risk
arbitrage theory of return

Detailed SolutionGross domestic product, world economy strength and level of inflation are factors which is used to determine

8. Security present value is Rs 100 and future value is Rs 150 after 10 years and value of ‘I = interest rate’ will be

4.14%
0.59%
0.69%
0.79%

Detailed SolutionSecurity present value is Rs 100 and future value is Rs 150 after 10 years and value of ‘I = interest rate’ will be

9. An efficient market hypothesis states all public information which is reflected in current market prices is classified as

weak form efficiency
strong form efficiency
market efficiency
semi strong efficiency

Detailed SolutionAn efficient market hypothesis states all public information which is reflected in current market prices is classified as

10. Market required return is subtracted from risk free rate which is used to calculate

quoted risk premium
market risk premium
portfolio risk premium
unquoted risk premium

Detailed SolutionMarket required return is subtracted from risk free rate which is used to calculate

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