Financial management Archives - Page 3 of 112 - MCQ and Quiz for Exams

21. In weighted average cost of capital, a company can affect its capital cost through

policy of capital structure

policy of dividends

policy of investment

all of above

Detailed SolutionIn weighted average cost of capital, a company can affect its capital cost through

22. Rate denoted as r* is best classified as

real risk-free interest rate

real-risk free nominal rate

real-risk free quoted rate

real-risk free nominal premium

Detailed SolutionRate denoted as r* is best classified as

23. Process of calculating future value of money from present value is classified as

compounding

discounting

money value

stock value

Detailed SolutionProcess of calculating future value of money from present value is classified as

24. Pricing model approach in which it is assumed that stock price can have one of two values of stock is classified as

valued approach

marketability approach

stock approach

binomial approach

Detailed SolutionPricing model approach in which it is assumed that stock price can have one of two values of stock is classified as

25. In MM Model with taxes, where ‘r’ is the interest rate, ‘D’ is the total debt and ‘t’ is tax rate, then present valued shields would be:

r Ã D Ã t

r Ã D

D Ã t

$$rac{{ ext{D} imes ext{r}}}{{ ext{l} - ext{t}}}$$

Detailed SolutionIn MM Model with taxes, where ‘r’ is the interest rate, ‘D’ is the total debt and ‘t’ is tax rate, then present valued shields would be:

26. Marginal cost of capital is the cost of:

Additional Sales

Additional Funds

Additional Interests

None of the above

Detailed SolutionMarginal cost of capital is the cost of:

27. Student loans, mortgages and car loans are examples of

lump sum amount

deferred annuity

annuity due

payment fixed series

Detailed SolutionStudent loans, mortgages and car loans are examples of

28. In India, Commercial Papers are issued as per the guidelines issued by:

Securities and Exchange Board of India

Reserve Bank of India

Forward Market Commission

None of the above

Detailed SolutionIn India, Commercial Papers are issued as per the guidelines issued by:

29. If a company issues new share capital to redeem debentures, then:

OL will increase

FL will increase

OL will decrease

FL will decrease

Detailed SolutionIf a company issues new share capital to redeem debentures, then:

30. Capital Budgeting is a part of:

Investment Decision

Working Capital Management

Marketing Management

Capital Structure

Detailed SolutionCapital Budgeting is a part of:

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