Financial management

21. Process of selling company stock at large to general public and get lending from banks is classified as an

initial public offering
external public offering
internal public offering
unprofessional offering

Detailed SolutionProcess of selling company stock at large to general public and get lending from banks is classified as an

22. In capital asset pricing model, an amount of risk that stock contributes to portfolio of market is classified as

stand-alone coefficient
relevant coefficient
alpha coefficient
beta coefficient

Detailed SolutionIn capital asset pricing model, an amount of risk that stock contributes to portfolio of market is classified as

23. In capital budgeting, term of bond which has great sensitivity to interest rates is

long-term bonds
short-term bonds
internal term bonds
external term bonds

Detailed SolutionIn capital budgeting, term of bond which has great sensitivity to interest rates is

24. _________ is equal to (common shareholders’ equity/common shares outstanding).

book value per share
liquidation value per share
market value per share
Tobin's Q

Detailed Solution_________ is equal to (common shareholders’ equity/common shares outstanding).

25. Of all stocks in a portfolio, required rate of return is classified as

return portfolio
in volatile portfolio
volatile portfolio
market portfolio

Detailed SolutionOf all stocks in a portfolio, required rate of return is classified as

26. Free cash flow is Rs 15000, operating cash flow is Rs 3000, investment outlay cash flow is Rs 5000 then salvage cash flow will be

Rs 17,000.00
-Rs 17,000.00
Rs 7,000.00
-Rs 7,000.00

Detailed SolutionFree cash flow is Rs 15000, operating cash flow is Rs 3000, investment outlay cash flow is Rs 5000 then salvage cash flow will be

27. An amount invested is Rs 2000 and return is Rs 200 then rate of return would be

0.10%
10.00%
Rs 1,800.00
Rs 2,200.00

Detailed SolutionAn amount invested is Rs 2000 and return is Rs 200 then rate of return would be

28. A growth industry is defined as ____________.

an industry with 15% rate of growth per annum
an industry where demand for its product is growing
an industry with high capital investment
an industry with average growth higher than the growth of the economy

Detailed SolutionA growth industry is defined as ____________.

29. Type of risk in which beta is equal to one is classified as

multiple risk stock
varied risk stock
total risk stock
average risk stock

Detailed SolutionType of risk in which beta is equal to one is classified as

30. Risk affects any firm with factors such as war, recessions, inflation and high interest rates is classified as

diversifiable risk
market risk
stock risk
portfolio risk

Detailed SolutionRisk affects any firm with factors such as war, recessions, inflation and high interest rates is classified as

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