Financial management Archives

41. Total assets divided common equity is a formula uses for calculating

equity multiplier

graphical multiplier

turnover multiplier

stock multiplier

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42. While calculating the weighted average cost of capital, market value weights are preferred because ____________.

Book value weights are historical in nature

This is in conformity with the definition of cost of capital as the investors minimum required rate of return

Book value weights fluctuate violently

Market value weights are fairly consistent over a period of time.

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43. The formula of EBIT = ________

Sales - Variable cost

Contribution - Fixed cost

Sales - Fixed cost

All the above

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44. Mumbai stock exchange was recognized on a permanent basis in___________.

1950

1956

1957

1965

Detailed

Solution

45. Standard deviation is divided by expected rate of return is used to calculate

coefficient of variation

coefficient of deviation

coefficient of standard

coefficient of return

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46. Cost of capital may be defined as:

Weighted Average cost of all debts

Rate of Return expected by Equity Shareholders

Average IRR of the Projects of the firm

Minimum Rate of Return that the firm should earn

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47. Investment bankers perform the following role ___________.

market new stock and bond issues for firms

provide advice to the firms as to market conditions, price, etc

design securities with desirable properties

all of the above

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48. Two alternative expected returns are compared with help of

coefficient of variation

coefficient of deviation

coefficient of standard

coefficient of return

Detailed

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Solution