[amp_mcq option1=”Equity Share Capital” option2=”Preference Share Capital” option3=”Debentures” option4=”Both A and B” correct=”option4″]
Detailed SolutionTax-rate is relevant and important for calculation of specific cost of capital of:
Financial management
32. If future return on common stock is 14% and rate on T-bonds is 5% then current market risk premium will be
[amp_mcq option1=”19.00%” option2=”9.00%” option3=”Rs 9″ option4=”Rs 19″ correct=”option2″]
33. Reinvestment risk of bonds is higher on
[amp_mcq option1=”short maturity bonds” option2=”high maturity bonds” option3=”high premium bonds” option4=”high inflated bonds” correct=”option2″]
34. Preferred dividend is Rs 50 and required rate of return is 2.5% then value of preferred stock would be
[amp_mcq option1=”Rs 20.00″ option2=”Rs 125.00″ option3=”Rs 2,000.00″ option4=”Rs 52.50″ correct=”option4″]
35. Which of the following is not an objective of cash management?
[amp_mcq option1=”Maximization of cash balance” option2=”Minimization of cash balance” option3=”Optimization of cash balance” option4=”Zero cash balance” correct=”option4″]
Detailed SolutionWhich of the following is not an objective of cash management?
36. In financial planning, a higher strike price leads to call option
[amp_mcq option1=”price is higher” option2=”rate is lower” option3=”price is lower” option4=”rate is higher” correct=”option3″]
Detailed SolutionIn financial planning, a higher strike price leads to call option
37. Situation in which firm limits expenditures on capital is classified as
[amp_mcq option1=”optimal rationing” option2=”capital rationing” option3=”marginal rationing” option4=”transaction rationing” correct=”option2″]
Detailed SolutionSituation in which firm limits expenditures on capital is classified as
38. Present value of future cash flows is Rs 2000 and an initial cost is Rs 1100 then profitability index will be
[amp_mcq option1=”55.00%” option2=”1.82″ option3=”0.55″ option4=”1.82%” correct=”option2″]
39. Type of cost which is used to raise common equity by reinvesting internal earnings is classified as
[amp_mcq option1=”cost of mortgage” option2=”cost of common equity” option3=”cost of stocks” option4=”cost of reserve assets” correct=”option3″]
40. Profitability Index, when applied to Divisible Projects, impliedly assumes that:
[amp_mcq option1=”Project cannot be taken in parts” option2=”NPV is linearly proportionate to part of the project taken up” option3=”NPV is additive in nature” option4=”Both B and C” correct=”option4″]
Detailed SolutionProfitability Index, when applied to Divisible Projects, impliedly assumes that: