Financial management

31. Corporate governance charter of rules of behaving is applicable on

competitors
shareholders
directors
all of above

Detailed SolutionCorporate governance charter of rules of behaving is applicable on

32. Markets which bring closer institutions needing funds and with surplus funds are classified as

financial markets
corporate institutions
hedge firms
retirement planners

Detailed SolutionMarkets which bring closer institutions needing funds and with surplus funds are classified as

33. External factors such as expiration of basic patents and industry competition effect

patents premium
competition premium
company's beta
expiry premium

Detailed SolutionExternal factors such as expiration of basic patents and industry competition effect

34. Initial cost is Rs 5000 and probability index is 3.2 then present value of cash flows is

Rs 8,200.00
Rs 16,000.00
Rs 10,000.00
Rs 1,562.50

Detailed SolutionInitial cost is Rs 5000 and probability index is 3.2 then present value of cash flows is

35. High portfolio return is 6.5% and low portfolio return is 3.0% then HML portfolio will be

2.16%
9.50%
3.50%
0.4615 times

Detailed SolutionHigh portfolio return is 6.5% and low portfolio return is 3.0% then HML portfolio will be

36. Net income available to stockholders is Rs 150 and total assets are Rs 2,100 then return on total assets would be

0.07%
7.14%
0.05 times
7.15 times

Detailed SolutionNet income available to stockholders is Rs 150 and total assets are Rs 2,100 then return on total assets would be

37. A model which regresses return of stock against return of market is classified as

regression model
market model
error model
risk free model

Detailed SolutionA model which regresses return of stock against return of market is classified as

38. An implicit cost of increasing proportion of debt is:

Tax should would not be available on new debt
P.E. Ratio would increase
Equity shareholders would demand higher return
Rate of Return of the company would decrease

Detailed SolutionAn implicit cost of increasing proportion of debt is:

39. Bonds which are more risky than corporate bonds and are issued by major corporations are classified as

common stocks
corporate stocks
leases
preferred stocks

Detailed SolutionBonds which are more risky than corporate bonds and are issued by major corporations are classified as

40. In binomial approach of option pricing model, fourth step is to create

equalize domain of payoff
equalize ending price
riskless investment
high risky investment

Detailed SolutionIn binomial approach of option pricing model, fourth step is to create

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