Financial management

11. In expected rate of return for constant growth, an expected dividend yield must be

functional decreasing
constant
continuously growing
functional increasing

Detailed SolutionIn expected rate of return for constant growth, an expected dividend yield must be

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12. Real risk-free rate is applicable when it is expected that there will be

high inflation
low inflation
no inflation
none of above

Detailed SolutionReal risk-free rate is applicable when it is expected that there will be

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13. In MM-Model, irrelevance of capital structure is based on:

Cost of Debt and Equity
Arbitrage Process
Decreasing k0
All of the above

Detailed SolutionIn MM-Model, irrelevance of capital structure is based on:

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14. Credit Policy of a firm should involve a trade-off between increased:

Sales and Increased Profit
Profit and Increased Costs of Receivables
Sales and Cost of goods sold
None of the above

Detailed SolutionCredit Policy of a firm should involve a trade-off between increased:

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15. Present value of portfolio is Rs 900 and current value of stock in portfolio is Rs 1500 then current option price would be

Rs 2,400.00
-Rs 600.00
-Rs 2,400.00
Rs 600.00

Detailed SolutionPresent value of portfolio is Rs 900 and current value of stock in portfolio is Rs 1500 then current option price would be

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16. Tendency of people to blame failure on bad luck but given tribute of success to themselves is classified as

self-attribution bias
self-success bias
self-failure bias
self-condition bias

Detailed SolutionTendency of people to blame failure on bad luck but given tribute of success to themselves is classified as

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17. Which of the following is not a spontaneous source of short-term funds?

Trade credit
Accrued expenses
Provision for dividend
All of the above

Detailed SolutionWhich of the following is not a spontaneous source of short-term funds?

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18. In capital asset pricing model, stock with high standard deviation tend to have

low variation
low beta
high beta
high variation

Detailed SolutionIn capital asset pricing model, stock with high standard deviation tend to have

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19. Which of the following has the highest cost of capital?

Equity shares
Loans
Bonds
Preference shares

Detailed SolutionWhich of the following has the highest cost of capital?

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20. Debt to Total Assets Ratio can be improved by:

Borrowing More
Issue of Debentures
Issue of Equity Shares
Redemption of Debt

Detailed SolutionDebt to Total Assets Ratio can be improved by:

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