Financial management

1. Company low earning power and high interest cost cause financial changes which have

high return on equity
high return on assets
low return on assets
low return on equity

Detailed SolutionCompany low earning power and high interest cost cause financial changes which have

2. Financial security in which there is no default risk and issues by U.S governments is classified as

U.S treasury bonds
mortgages
municipal bonds
corporate bonds

Detailed SolutionFinancial security in which there is no default risk and issues by U.S governments is classified as

3. Which of the following assumes constant kd and kc?

Net Income Approach
Net Operating Income Approach
Traditional Approach
MM Model

Detailed SolutionWhich of the following assumes constant kd and kc?

4. In expected rate of return for constant growth, dividends are expected to grow but with the

constant rate
variable rate
yielding rate
returning yield

Detailed SolutionIn expected rate of return for constant growth, dividends are expected to grow but with the

5. What is Economic Order Quantity?

Cost of an order
Cost of stock
Re-order level
Optimum order size

Detailed SolutionWhat is Economic Order Quantity?

6. Capital Budgeting Decisions are based on:

Incremental Profit
Incremental Cash Flows
Incremental Assets
Incremental Capital

Detailed SolutionCapital Budgeting Decisions are based on:

7. A tighter probability distribution shows the

higher risk
lower risk
expected risk
peaked risk

Detailed SolutionA tighter probability distribution shows the

8. Purchase cost of assets over its useful life is classified as

appreciation
depreciation
appreciated assets
appreciated liabilities

Detailed SolutionPurchase cost of assets over its useful life is classified as

9. According to Markowitz, an efficient portfolio is one that has the_________________.

largest expected return for the smallest level of risk
largest expected return and zero risk
largest expected return for a given level of risk
smallest level of risk

Detailed SolutionAccording to Markowitz, an efficient portfolio is one that has the_________________.

10. Which of the following cost of capital require tax adjustment?

Cost of Equity Shares
Cost of Preference Shares
Cost of Debentures
Cost of Retained Earnings

Detailed SolutionWhich of the following cost of capital require tax adjustment?

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