Financial management

11. During planning period, a marginal cost for raising a new debt is classified as

debt cost
relevant cost
borrowing cost
embedded cost

Detailed SolutionDuring planning period, a marginal cost for raising a new debt is classified as

12. Input call parity relationship, put option minus call option in addition with stock is equal to

exercise price present value
exercise price future value
time line value
time value of bond

Detailed SolutionInput call parity relationship, put option minus call option in addition with stock is equal to

13. Degree of total leverage can be applied in measuring change in _________.

EBIT to a percentage change in quantity
EPS to a percentage change in EBIT
EPS to a percentage change in quantity
Quantity to a percentage change in EBIT

Detailed SolutionDegree of total leverage can be applied in measuring change in _________.

14. In modern investment analysis, the risk for a stock is related to its_____________.

leverage factor
standard deviation
beta coefficient
coefficient of variation

Detailed SolutionIn modern investment analysis, the risk for a stock is related to its_____________.

15. Walters model on dividend policy assumes that.

the firm offers an increasing amount of dividend per share at a given level of price per share
the firm has a finite life
the cost of capital of the firm is variable
equal to current assets plus current liabilities including bank borrowings

Detailed SolutionWalters model on dividend policy assumes that.

16. In capital market line, risk of efficient portfolio is measured by its

standard deviation
variance
aggregate risk
ineffective risk

Detailed SolutionIn capital market line, risk of efficient portfolio is measured by its

17. Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

Cash Flows are easy to calculate
Cash Flows are suggested by SEBI
Cash is more important than profit
None of the above

Detailed SolutionEvaluation of Capital Budgeting Proposals is based on Cash Flows because:

18. Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as

investment banking houses
exchange houses
transfer houses
foreign exchange houses

Detailed SolutionMerrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as

19. Under income-tax provisions, depreciation on lease asset is allowed to:

Lessor
Lessee
Any of the two
None of the two

Detailed SolutionUnder income-tax provisions, depreciation on lease asset is allowed to:

20. The job of a finance manager is confined to:

Raising funds
Management of cash
Raising of funds and their effective utilization
None of these

Detailed SolutionThe job of a finance manager is confined to:

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