Financial management

41. Risk in which value of investment depends on what happens to foreign exchange rates is classified as

preferred risk
exchange rate risk
country risk
foreign risk

Detailed SolutionRisk in which value of investment depends on what happens to foreign exchange rates is classified as

42. Which of the following is the assumption of the MM model on dividend policy?

The firm is an all-equity firm
The investments of the firm are financed solely by retained earnings
The firm has an infinite life
None of the above

Detailed SolutionWhich of the following is the assumption of the MM model on dividend policy?

43. Cost of new debt or marginal debt is also classified as

historical rate
embedded rate
marginal rate
Both A and B

Detailed SolutionCost of new debt or marginal debt is also classified as

44. The relevant risk for a well-diversified portfolio is____________.

interest rate risk
inflation risk
business risk
market risk

Detailed SolutionThe relevant risk for a well-diversified portfolio is____________.

45. EBIT means _____________.

Operating Income
Operating Profit
Earnings before interest and tax
All of the above

Detailed SolutionEBIT means _____________.

46. If an expected final stock price is Rs 85 and an original investment is Rs 70 then value of expected capital gain would be

Rs 15.00
-Rs 15.00
Rs 155.00
-Rs 155.00

Detailed SolutionIf an expected final stock price is Rs 85 and an original investment is Rs 70 then value of expected capital gain would be

47. In time value of money, periodic rate is

not shown on timeline
shown on timeline
multiplied on timeline
divided on timeline

Detailed SolutionIn time value of money, periodic rate is

48. Which of the following is related to Receivables Management?

Cash Budget
Economic Order Quantity
Ageing Schedule
All of the above

Detailed SolutionWhich of the following is related to Receivables Management?

49. Intangible assets such as copyrights, trademarks and patents are applicable for

depreciation
amortization
stock amortization
perishable assets

Detailed SolutionIntangible assets such as copyrights, trademarks and patents are applicable for

50. A short-term lease which is often cancellable is known as:

Finance Lease
Net Lease
Operating Lease
Leverage Lease

Detailed SolutionA short-term lease which is often cancellable is known as:

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