Financial management

1. Formula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate

available income
cash income
free cash flows
free distribution

Detailed SolutionFormula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate

2. The sustainable growth rate of a firm can be calculated as the product of the_________.

return on assets and the return on equity
dividend payout ratio and leverage
retention rate and the return on equity
net profit margin and total sales

Detailed SolutionThe sustainable growth rate of a firm can be calculated as the product of the_________.

3. Redemption option which protects investors against rise in interest rate is considered as

redeemable at deferred
redeemable at par
redeemable at refund
redeemable at finding

Detailed SolutionRedemption option which protects investors against rise in interest rate is considered as

4. Falling interest rate leads change to bondholder income which is

reduction in income
increment in income
matured income
frequent income

Detailed SolutionFalling interest rate leads change to bondholder income which is

5. Expected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be

Rs 30.00
-Rs 30.00
Rs 70.00
-Rs 70.00

Detailed SolutionExpected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be

6. Financial Leverage arises because of:

Fixed cost of production
Variable cost
Interest cost
None of the above

Detailed SolutionFinancial Leverage arises because of:

7. Historical growth rates, analysis forecasts and retention growth model are approaches to estimate

present value of gain
growth rate
growth gain
discounted gain

Detailed SolutionHistorical growth rates, analysis forecasts and retention growth model are approaches to estimate

8. Sales revenue Rs 90,000, operating taxes Rs 30,000 and operating capital Rs 15,000 then value of free cash flows will be

Rs 45,000.00
Rs 13,500.00
Rs 65,000.00
Rs 75,000.00

Detailed SolutionSales revenue Rs 90,000, operating taxes Rs 30,000 and operating capital Rs 15,000 then value of free cash flows will be

9. Total common equity divided by common shares outstanding which is used to calculate

book value of share
market value of shares
earning per share
dividends per share

Detailed SolutionTotal common equity divided by common shares outstanding which is used to calculate

10. Coupon payment is calculated with help of interest rate, then this rate considers as

payment interest
par interest
coupon interest
yearly interest rate

Detailed SolutionCoupon payment is calculated with help of interest rate, then this rate considers as

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