[amp_mcq option1=”Public issue” option2=”Right Issue” option3=”Private placement” option4=”Bought-Out-Deal” correct=”option2″]
Financial management
12. For which of the following factors are the debentures more attractive to the investors?
[amp_mcq option1=”The principal is redeemable at maturity” option2=”A debenture-holder enjoys prior claim on the assets of the company over its shareholders in the event of liquidation” option3=”trustee is appointed to preserve the interest of the debenture holders” option4=”All the above.” correct=”option4″]
13. MM Model argues that dividend is irrelevant as:
[amp_mcq option1=”the value of the firm depends upon earning power” option2=”the investors buy shares for capital gain” option3=”dividend is payable after deciding the retained earnings” option4=”dividend is a small amount” correct=”option1″]
Detailed SolutionMM Model argues that dividend is irrelevant as:
14. Method of inventory recording gives lower cost of goods sold in income statement is classified as
[amp_mcq option1=”last in first out” option2=”last out receivable” option3=”First out receivable” option4=”First in first out” correct=”option1″]
15. Tax free bonds issue for welfare by industrial agencies or pollution control agencies are classified as
[amp_mcq option1=”agent bonds” option2=”development bonds” option3=”pollution control bonds” option4=”Both B and C” correct=”option2″]
16. A firm will have favourable leverage if its _____ are more than the debt cost
[amp_mcq option1=”debt” option2=”interest” option3=”equity” option4=”earnings” correct=”option3″]
Detailed SolutionA firm will have favourable leverage if its _____ are more than the debt cost
17. When a company uses increased fixed cost for production, this is an example of what type of leverage.
[amp_mcq option1=”operating leverage” option2=”financial leverage” option3=”variable cost leverage” option4=”combined leverage” correct=”option1″]
18. Step in initial public offering in which hired agents act on behalf of owners is classified as
[amp_mcq option1=”hiring problems” option2=”agency problems” option3=”corporation internal problems” option4=”corporation external problems” correct=”option2″]
19. If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ:
[amp_mcq option1=”$${\left( {\frac{{2{\text{AO}}}}{{\text{C}}}} \right)^2}$$” option2=”$$\sqrt {\frac{{2{\text{AO}}}}{{\text{C}}}} $$” option3=”2A ÷ OC” option4=”2AOC” correct=”option2″]
20. If the intrinsic value of a share is less than the market price, which of the most reasonable?
[amp_mcq option1=”That shares have lesser degree of risk” option2=”That market is over valuing the shares” option3=”That the company is high dividend paying” option4=”That market is undervaluing the share” correct=”option4″]