Financial management Archives - MCQ and Quiz for Exams

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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