Financial management

1. Value generally promises to pay at maturity date and a firm borrows is considered as bonds

bond value
per value
state value
par value

Detailed SolutionValue generally promises to pay at maturity date and a firm borrows is considered as bonds

2. The constant growth model of equity valuation assumes that _____________.

the dividends paid by the company remain constant
the dividends paid by the company grow at a constant rate of growth
the cost of equity may be less than or equal to the growth rate
the growth rate is less than the cost of equity.

Detailed SolutionThe constant growth model of equity valuation assumes that _____________.

3. Procedure of finding present values in time value of money is classified as

compounding
discounting
money value
stock value

Detailed SolutionProcedure of finding present values in time value of money is classified as

4. Which of the following is the expression for operating leverage?

Contribution/EBIT
EBT/Contribution
Contribution/EAT
Contribution/Quantity

Detailed SolutionWhich of the following is the expression for operating leverage?

5. Which of the following is not an objective of financial management?

Maximization of wealth of shareholders
Maximization of profits
Mobilization of funds at an acceptable cost
Ensuring discipline in the organization.

Detailed SolutionWhich of the following is not an objective of financial management?

6. An annual interest payment divided by current price of bond is considered as

current yield
maturity yield
return yield
earning yield

Detailed SolutionAn annual interest payment divided by current price of bond is considered as

7. Ownership securities are represented by _______.

stock
loan
debt
debentures

Detailed SolutionOwnership securities are represented by _______.

8. Which of the following is not a standard method of inventory valuation?

First in First out
Standard Cost
Average Pricing
Realizable Value

Detailed SolutionWhich of the following is not a standard method of inventory valuation?

9. Risk lover’s utility curves have __________.

Positive slope
Negative slope
Convex to the origin
Negative slope and convex to the origin

Detailed SolutionRisk lover’s utility curves have __________.

10. Operating leverage measures ____________.

business risk
financial risk
both risks
production risk

Detailed SolutionOperating leverage measures ____________.

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