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Financial management

41. Working Capital Turnover measures the relationship of Working Capital with:

[amp_mcq option1=”Fixed Assets” option2=”Sales” option3=”Purchases” option4=”Stock” correct=”option2″]

Detailed SolutionWorking Capital Turnover measures the relationship of Working Capital with:

42. If retention rate is 0.68 then payout rate will be

[amp_mcq option1=”1.47″ option2=”1.68″ option3=”0.32″ option4=”0.68″ correct=”option1″]

Detailed SolutionIf retention rate is 0.68 then payout rate will be

43. Low default-risk security issued by financially secure firms is classified as

[amp_mcq option1=”U.S treasury bills” option2=”commercial paper” option3=”certificate of deposit” option4=”mutual funds” correct=”option1″]

Detailed SolutionLow default-risk security issued by financially secure firms is classified as

44. An amount invested is Rs 1500 and an amount received is Rs 2000 then return would be

[amp_mcq option1=”Rs 500.00″ option2=”-Rs 500.00″ option3=”Rs 3,500.00″ option4=”-Rs 3,500.00″ correct=”option1″]

Detailed SolutionAn amount invested is Rs 1500 and an amount received is Rs 2000 then return would be

45. An excess of actual price of option over an exercise value of option is classified as

[amp_mcq option1=”time value options” option2=”actual options” option3=”estimated options” option4=”optional pricing” correct=”option1″]

Detailed SolutionAn excess of actual price of option over an exercise value of option is classified as

46. Financial security issued by banks operating outside U.S is classified as

[amp_mcq option1=”dollar bonds” option2=”euro deposits” option3=”Eurodollar market deposits” option4=”euro bonds” correct=”option4″]

Detailed SolutionFinancial security issued by banks operating outside U.S is classified as

47. Total common equity Rs 996,000,000 and shares outstanding 50,000,000 then book value per share would be

[amp_mcq option1=”Rs 0.05″ option2=”Rs 15.00″ option3=”Rs 19.92″ option4=”Rs 14.00″ correct=”option2″]

Detailed SolutionTotal common equity Rs 996,000,000 and shares outstanding 50,000,000 then book value per share would be

48. Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?

[amp_mcq option1=”Net income approach” option2=”Modigliani and Miller approach” option3=”Net operating income approach” option4=”Traditional approach” correct=”option1″]

Detailed SolutionUnder which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?

49. Cost of common stock is 15% and bond yield is 10.5% then bond risk premium will be

[amp_mcq option1=”1.43%” option2=”8.50%” option3=”25.50%” option4=”4.50%” correct=”option2″]

Detailed SolutionCost of common stock is 15% and bond yield is 10.5% then bond risk premium will be

50. A company sells its stock shares for raising more equity capital is classified as

[amp_mcq option1=”dealer communication offering” option2=”seasoned equity offering” option3=”electronic equity offering” option4=”electronic order offering” correct=”option2″]

Detailed SolutionA company sells its stock shares for raising more equity capital is classified as

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