Financial management

41. Which of the following is true for Net Income Approach?

Higher equity is better
Higher debt is better
Debt ratio is irrelevant
None of the above

Detailed SolutionWhich of the following is true for Net Income Approach?

42. An unlimited liability is classified as liabilities of the

limited partners
general partners
venture partners
corporate partners

Detailed SolutionAn unlimited liability is classified as liabilities of the

43. Price per share is Rs 25 and cash flow per share is Rs 6 then price to cash flow ratio would be

0.24 times
4.16 times
4.16%
24.00%

Detailed SolutionPrice per share is Rs 25 and cash flow per share is Rs 6 then price to cash flow ratio would be

44. Relevant information about stock market price if it is given, then this price is called

market price
intrinsic price
extrinsic price
unstable price

Detailed SolutionRelevant information about stock market price if it is given, then this price is called

45. Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as

non-paid earnings
common earnings
retained earnings
preferred earnings

Detailed SolutionEarnings that are not paid as dividends to stockholders and have cumulative amount are classified as

46. In capital budgeting, a negative net present value results in

zero economic value added
percent economic value added
negative economic value added
positive economic value added

Detailed SolutionIn capital budgeting, a negative net present value results in

47. Value of free cash flows Rs55000, operating cost and taxes Rs30000, then value of sales revenues (in Rs) will be

Rs 25,000.00
Rs 85,000.00
Rs 35,000.00
Rs 45,000.00

Detailed SolutionValue of free cash flows Rs55000, operating cost and taxes Rs30000, then value of sales revenues (in Rs) will be

48. Investment bankers operate in the______________.

primary market
secondary market
A and B both
None of above

Detailed SolutionInvestment bankers operate in the______________.

49. In case the firm is all-equity financed, WACC would be equal to:

Cost of Debt
Cost of Equity
Neither A nor B
Both A and B

Detailed SolutionIn case the firm is all-equity financed, WACC would be equal to:

50. Arbitrage is the level processing technique introduced in _________.

Net income approach
MM approach
Operating approach
Traditional approach

Detailed SolutionArbitrage is the level processing technique introduced in _________.

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