[amp_mcq option1=”be fixed according to the rate of growth” option2=”changes with the volume of production” option3=”does not change with volume of production” option4=”remains constant” correct=”option2″]
Financial management
42. Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies?
[amp_mcq option1=”Net Income Approach” option2=”Traditional Approach” option3=”Modigliani-Miller Approach” option4=”Net operating Income” correct=”option3″]
43. The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called ____________.
[amp_mcq option1=”working capital decision” option2=”an investment decision” option3=”a production decision” option4=”a sales decision” correct=”option2″]
44. Value of future dividends after horizon date is classified as
[amp_mcq option1=”hypothesis value” option2=”horizon value” option3=”terminal value” option4=”Both B and C” correct=”option3″]
Detailed SolutionValue of future dividends after horizon date is classified as
45. Financial security kept by non-financial corporations is
[amp_mcq option1=”deposit cheque” option2=”distribution cost” option3=”short term treasury bills” option4=”short term capital cost” correct=”option3″]
Detailed SolutionFinancial security kept by non-financial corporations is
46. In retention growth model, percent of net income firms usually pay out as shareholders dividends is classified as
[amp_mcq option1=”payout ratio” option2=”payback ratio” option3=”growth retention ratio” option4=”present value of ratio” correct=”option1″]
47. Corporations that buy financial instruments with money accepted from savers are classified as
[amp_mcq option1=”debit funds” option2=”credit funds” option3=”mutual funds” option4=”insurance funds” correct=”option3″]
48. Corporations such as Citigroup, American Express and Fidelity are classified as
[amp_mcq option1=”financial services corporations” option2=”common service corporations” option3=”preferred service corporations” option4=”commercial service corporations” correct=”option1″]
Detailed SolutionCorporations such as Citigroup, American Express and Fidelity are classified as
49. Which of the following is not a feature of an optimal capital structure?
[amp_mcq option1=”Safety” option2=”Flexibility” option3=”Control” option4=”Solvency” correct=”option1″]
Detailed SolutionWhich of the following is not a feature of an optimal capital structure?
50. The Markowitz model identifies the efficient set of portfolios, which offers the ____________.
[amp_mcq option1=”highest return for any given level of risk or the lowest risk for any given level of return” option2=”least-risk portfolio for a conservative, middle-aged investor” option3=”long-run approach to wealth accumulation for a young investor” option4=”risk-free alternative for risk-averse investors” correct=”option1″]