Financial management

41. In weighted average capital, capital structure weights estimation does not rely on value of

investor's equity
market value of equity
book value of equity
stock equity

Detailed SolutionIn weighted average capital, capital structure weights estimation does not rely on value of

42. If coupon rate is less than going rate of interest then bond will be sold

seasoned par value
more than its par value
seasoned par value
at par value

Detailed SolutionIf coupon rate is less than going rate of interest then bond will be sold

43. An initial cost is Rs 6000 and probability index is 5.6 then present value of cash flows will be

Rs 25,000.00
Rs 28,000.00
Rs 33,600.00
Rs 30,000.00

Detailed SolutionAn initial cost is Rs 6000 and probability index is 5.6 then present value of cash flows will be

44. Which of the following is not used in Capital Budgeting?

Time Value of Money
Sensitivity Analysis
Net Assets Method
Cash Flows

Detailed SolutionWhich of the following is not used in Capital Budgeting?

45. Present value takes _________.

Discounting rate
Compounding rate
Inflation rate
Deflation rate

Detailed SolutionPresent value takes _________.

46. Walter’s Model suggests that a firm can always increase i.e., of the share by:

Increasing Dividend
Decreasing Dividend
Constant Dividend
None of the above

Detailed SolutionWalter’s Model suggests that a firm can always increase i.e., of the share by:

47. An investment outlay cash flow is Rs 2000, an operating cash flow is Rs 1500 and salvage cash flow is Rs 3000 then free cash flow would be

Rs 500.00
Rs 2,500.00
Rs 650.00
Rs 6,500.00

Detailed SolutionAn investment outlay cash flow is Rs 2000, an operating cash flow is Rs 1500 and salvage cash flow is Rs 3000 then free cash flow would be

48. Higher FL is related the use of:

Higher Equity
Higher Debt
Lower Debt
Variable Cost

Detailed SolutionHigher FL is related the use of:

49. According to the _______ model, the dividend decision is irrelevant.

MM
Garden
Walter
XY

Detailed SolutionAccording to the _______ model, the dividend decision is irrelevant.

50. If a firm has no debt, which one is correct?

OL is one
FL is one
OL is zero
FL is zero

Detailed SolutionIf a firm has no debt, which one is correct?

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