Financial management

1. The most popular type of Investment Company is a ________.

unit investment trust
mutual fund
closed-end investment company
real estate investment trust

Detailed SolutionThe most popular type of Investment Company is a ________.

2. An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax

term structure
market premium
risk premium
cost of debt

Detailed SolutionAn interest rate which is paid by firm as soon as it issues debt is classified as pre-tax

3. If stock has a great risk related to it than a required return is

higher
lower
zero
all of above

Detailed SolutionIf stock has a great risk related to it than a required return is

4. Under the P/E model, stock price is a product of_____________.

EPS and DPS
P/E ratio and EPS
EPS and required return
P/E ratio and required return

Detailed SolutionUnder the P/E model, stock price is a product of_____________.

5. Double declining balance method and sum of years digits are included in

yearly method
single methods
double methods
accelerated methods

Detailed SolutionDouble declining balance method and sum of years digits are included in

6. According to Black Scholes model, short term seller receives today price which

short term cash proceeds
proceeds in cheques
full cash proceeds
zero proceeds

Detailed SolutionAccording to Black Scholes model, short term seller receives today price which

7. An inflation rate includes in bond’s interest rates is one which is inflation rate

at bond issuance
expected in future
expected at time of maturity
expected at deferred call

Detailed SolutionAn inflation rate includes in bond’s interest rates is one which is inflation rate

8. Dividend per share is Rs 15 and sell it for Rs 120 and floatation cost is Rs 3.0 then component cost of preferred stock will be

12.82 times
0.1282 times
12.82%
Rs 12.82

Detailed SolutionDividend per share is Rs 15 and sell it for Rs 120 and floatation cost is Rs 3.0 then component cost of preferred stock will be

9. In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate

market total value
firm total value
industry value
taxes value

Detailed SolutionIn market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate

10. Receivables Management deals with:

Receipts of raw materials
Debtors collection
Creditors management
Inventory management

Detailed SolutionReceivables Management deals with:

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